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Are the charges for false claims with BP too harsh?

Marissa Hall | Shale Plays Media

The Gulf Coast Claims Facility (GCCF) created by BP to address claims following the Deepwater Horizon spill has seen its fair share of fraudulent claims. According to Ken Feinberg, who heads the program, only about a third of the claims are valid. An article by Walter Pavlo for Forbes magazine tells the story of Vietnamese immigrant Luom Van Ngo (pronounced “no”). Owner of the Regal Nail Salon in the Waveland, Mississippi Walmart and father of five, Ngo followed ill advice to make a false claim to the GCCF.

Ngo obtained a crab and shrimp license, changed the date to before the spill (had to make it look like he had been working for a while in the business) and made up a fake receipt for a seafood sale to a local wholesaler.  In reality, there was no shrimp business, just a thriving nail salon franchise.   He entered a GCCF office not knowing how much his false claim would even bring.  Ngo supplied the information to an attendant and a calculation for his loss was made … $281,000.  Under the GCCF, a portion of the funds are released quickly with the remainder to follow.  He got a check for $18,000 and cashed it December 13, 2010.

Related: BP fulfills first 100 medical claims after Gulf spill

Ngo wasn’t arrested until October 22, 2013, and while he hadn’t received any more funds, his fraud charges were for the entire amount of $281,000. The recommended sentence for this, according to the Federal Sentencing Guidelines, was 33-41 months in a federal prison. Ngo received a 36 month sentence.

The case against Ngo was investigated by the United States Secret Service.  A lot of fire power to bring down such a small fish.  Ngo reports to federal prison in August and will most likely serve his time in a higher security prison (no prison camp), because he is not a U.S. citizen.

Of course, nobody believes that Ngo’s actions were okay. BP has enough on its plate in the wake of the Deepwater Horizon disaster without shelling out millions of dollars to false claims. However, the same guidelines which were used to sentence Ngo for 36 months were used on 85 cases of insider trading with massive companies involving millions of dollars, and only 5 of the resulting sentences were longer than Ngo’s. It raises the question: was the sentencing too harsh?

See all the details of the case in Pavlo’s full article: Feds hit hard against those making false BP claims, maybe too hard


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