GALVESTON — Daniel Yeh, 55, of Sugar Land, the principal owner of Flagship Hotel Ltd., which operates the Flagship Hotel at 25th Street and Seawall Boulevard, has been sentenced to 30 months in prison for filing a false claim with FEMA’s Short Term Lodging Program in the aftermath of hurricanes Katrina and Rita, United States Attorney Don DeGabrielle announced Friday.
To date, 86 individuals have been charged in the Southern District of Texas with fraud relating to hurricanes Katrina and Rita, and Yeh is the 34th person to be sentenced to prison for FEMA fraud convictions.
At the hearing Friday afternoon, United States District Judge Melinda Harmon imposed the sentence and also ordered Yeh to pay a $30,000 fine.
Harmon denied a defense motion seeking a lower sentence because of a claim of diminished mental capacity, stating the medical testimony claiming Yeh’s brain tumor caused him to commit the crime was “not sound science.”
Yeh pleaded guilty Sept. 28, 2007, to filing a false claim during October 2005 with FEMA’s Short Term Lodging Program.
FEMA created that program to provide free hotel rooms to hurricanes Katrina and Rita evacuees. At that hearing, Yeh admitted he took over FEMA billing matters from one employee and directed another to fax the hotel’s daily report listing which guests were checked into which rooms, to his home each evening.
Yeh submitted the reimbursement claims through the Internet from home using his laptop computer, according to the U.S. Attorney’s office.
In early October 2005, Yeh provided a desk clerk with about 30 names to enter into the hotel reservation system at the FEMA rate of $84.99 a night, according to the U.S. Attorney’s office.
Yeh picked up the room cards and began billing FEMA for rooms in the names of these people even though they had not checked into the hotel, according to the U.S. Attorney’s office.
The investigation revealed that some of the names were of relatives and friends of Yeh’s who were not hurricane evacuees and that Yeh also billed FEMA for rooms in the names of hotel employees, according to the U.S. Attorney’s office.
The investigation into the Flagship for fraudulent billing began when federal agents received a tip stating that the hotel records showed full occupancy when a significant number of rooms were unoccupied.
Yeh, who has been free on bond, has been permitted by the court to remain on bond pending the issuance of an order to surrender for service of his sentence at a Bureau of Prisons facility to be determined in the near future.
