La Grange hotel charged with hurricane fraud

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La Grange hotel charged with hurricane fraud

Posted Monday, November 24, 2008

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Texas Attorney General Greg Abbott has charged the Cottonwood Inn in La Grange with advertising false room prices as evacuees fled Hurricane Ike. According to the state enforcement action, the defendants also unlawfully charged hotel taxes after Gov. Rick Perry issued a disaster declaration suspending the taxes.

On Sept. 12, 2008, Gov. Perry issued a disaster declaration suspending the collection of state and local hotel and motel taxes for victims of Hurricane Ike. The governor’s emergency orders suspended these taxes through Oct. 14, 2008. Charging hurricane evacuees hotel and motel taxes after the governor suspends them is prohibited by the Texas Deceptive Trade Practices Act.

“The defendants are charged with unlawfully advertising false room rates to hurricane evacuees,” Attorney General Abbott said. “As Gulf Coast residents fled Hurricane Ike, the defendants falsely advertised cheap room rates – but always charged more than double the advertised price. The Office of the Attorney General will aggressively pursue those who conduct unlawful activity during disaster situations.”

According to state investigators, the sign outside the Cottonwood Inn in La Grange advertised rooms for as low as $29.99. However, evidence obtained by the state indicates customers were actually charged $75 for their rooms. The state’s enforcement action charges the Cottonwood Inn’s owners, Jagdish Jajal and Asha Jajal, with deceptive and misleading advertising. According to court documents, the defendants also charged and collected state hotel taxes from Hurricane Ike evacuees when they were prevented from doing so under the governor’s disaster declaration.

The OAG is seeking civil penalties of up to $20,000 per violation and up to $250,000 per violation for victims over 65.

Texans who wish to file consumer complaints should call the OAG’s consumer hotline at (800) 252-8011. Information collected is relayed directly to agency investigators. Texans may also report disaster-related scams to the hotline, including home repair scams and charity scams.