FEMA Fatale
This Week In Blunders – April 20-26
“Don't bite off more than you can chew because nobody looks attractive spitting it back out.” – Carroll Bryant
When millions face starvation on a hurricane-stricken island, it’s probably best not to leave the emergency food service contract to someone named Tiffany.
Inexplicably, the Federal Emergency Management Agency awarded a $156 million contract to an Atlanta woman named Tiffany Brown after Hurricane Maria leveled Puerto Rico in September 2017.
Brown, now 45, promised her company, Tribute Contracting could deliver 10 million self-heating meals per day to the devastated U.S. island territory using 210 trucks she didn’t have.
FEMA either overlooked or failed to discover that Brown:
Had no experience providing disaster relief.
Had bungled at least five federal contracts in the past that all had to be canceled.
Employed only one person: her.
Was prone to shameless self-promotion and hyperbole.
In addition to running Tribute Contracting, Brown touted her own fashion company. She wrote self-published books and billed herself as a keynote speaker. On social media she described herself as “A Diva, Mogul, Author, Idealist with scars to prove it.”
But FEMA was in a pinch. So it was super woman with her minority-owned business to the rescue.
(And before anyone starts reveling in all this “go woke, go broke” tripe, please remember that this staggering FEMA folly occurred under President Donald Trump’s first term. And besides, like the president, Brown also launched her own crypto token.)
[[Don’t Miss: The Business Blunders Hall of Shame.]]]
Brown planned to contract help. That’s how she was going to to this. One company she hired was a wedding caterer with 11 employees who freeze-dried wild mushrooms and rice, chicken and rice, and vegetable soup.
She somehow delivered 50,000 meals but this was by the time 18.5 million meals were due under the contract, according to a 2018 report in The New York Times. And they didn’t meet the self-warming criteria set forth in the contract.
“They probably should have gone with someone else,” Brown conceded to the Times. “They were trying to fill the orders the best they could.”
Trump memorably threw rolls of paper towels at Puerto Ricans. Incensed Democrats led a Congressional investigation.
“It appears that the Trump Administration’s response to the hurricanes in Puerto Rico in 2017 suffered from the same flaws as the Bush Administration’s response to Hurricane Katrina in 2005,” wrote Reps. Elijah Cummings of Maryland and Stacey Plaskett, a nonvoting delegate from the United States Virgin Islands.
This week, Brown received a 12-year prison sentence for defrauding FEMA with a raft of lies and phony documents about her ability to deliver millions of meals in an impossibly short time-frame given the resources she actually commanded.
“Brown resorted to extraordinary lengths to defraud FEMA during a critical period when individuals were in desperate need of food resources during the devastating aftermath of Hurricane Maria,” said Acting U.S. Attorney Richard S. Moultrie, Jr. in January.
Brown first told her side of the story in 2018 interview with CBS News. “My biggest mistake was not asking for more help,” Brown said.
And in a 2022 post on Medium she blamed her prosecution on an “anti-woman theme.” She closed that post with and inspirational Bible verse, Philippians 4:13: “I can do all things through Christ who strengthens me.”
Well, no. It turns out that you can’t, Tiffany. And FEMA should have told you so.
If you’re so good at day trading, why are you stealing?
A Newtown, Conn., property manager on Thursday pleaded guilty to fleecing his clients out of $3 million to fund his losing day-trading hustle.
Timothy Mingione, 33, loved trading S&P 500 options and pinched his customers’ bank accounts to fund his dream, prosecutors allege.
Mingione tracked what he stole and returned the funds from time to time. But by spring 2024, he notched more than $1 million in trading losses and, by the end of September 2024, had stolen nearly $3 million, prosecutors allege.
He now faces up to 10 years in prison.
Some trade.
Another day, another alleged crypto klepto
Ramil Palafox, founder of PGI Global, allegedly told investors he was investing in crypto and making slick foreign exchange trades. Then he used the money to buy Lamborghinis and pricey trinkets.
The U.S. Securities and Exchange Commission announced civil charges against him on Tuesday. Palafox, 58, of Las Vegas, is also facing parallel criminal charges.
This is a $200 million “Ponzi-like scheme” with Palafox spending wildly on himself, prosecutors allege.
“Palafox attracted investors with the allure of guaranteed profits from sophisticated crypto asset and foreign exchange trading, but instead of trading, Palafox bought himself and his family cars, watches, and homes using millions of dollars of investor funds,” said Scott Thompson, Associate Director of the SEC’s Philadelphia Regional Office.
Nobody learns, even after Sam Bankman-Fried’s infamous heist at FTX.
Another day, another Ponzi scheme
And no matter how much investors lose to Ponzi schemes, there are always more of these time-honored scams in the Ponzi pipeline.
On Thursday, the CEO of Miami-based Biscayne Capital received a 10-year prison sentence for bilking his investors out of $130 million in what prosecutors described as “a brazen scheme of staggering proportions.”
Roberto Gustavo Cortes Ripalda, 58, told his investors he was using their funds to build luxury homes, but the bulk of their money went to prop up his failing business and perpetuate his Ponzi scheme.
Meantime, Cortes and his co-conspirators paid themselves millions of dollars for the service of churning money and blowing up their company.
You’d think that after Bernie Madoff’s exploits, investors would get wise about Ponzi schemes, but people have a remarkable ability to forget and even Harvard educated folks can fall for them.
It must be worth the price of admission, just like the fraud’s namesake Charlie Ponzi once said:
“Even if they never got anything for it, it was cheap at that price. … I had given them the best show that was ever staged in their territory since the landing of the Pilgrims! It was easily worth fifteen million bucks to watch me put the thing over.”
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The way we treat Puerto Rico is disgraceful. Still remember our fearless leader throwing paper towels at them....
This is what Trump has done with his businesses, like his purchase of the Atlantic City casinos. He made himself CEO took a big salary, but used his investors money to buy furnishings, and the imaginary worth of the company to buy even more on credit. Then declared bankruptcy, leaving his investors with the loss. It was all reported in the Washington Post. Better yet he had already done the same ting with his airline, steaks and others so called ventures. His marks think he is a businessman. He is the greatest conman since The Yellow Kid Weil.