ASHEVILLE, N.C. — A Marion, North Carolina, woman has been sentenced to prison for defrauding the Federal Emergency Management Agency (FEMA) in the wake of Hurricane Helene. Chief U.S. District Judge Martin Reidinger sentenced Peggy Lee Cantrell, 41, to three years in prison, to be followed by four years of supervised release. Cantrell was also ordered to pay restitution totaling $30,631.59 to FEMA.
The sentencing, which took place on September 17, 2026, concludes a case that U.S. Attorney Russ Ferguson for the Western District of North Carolina highlighted as a betrayal of public trust during a time of need. "In the wake of Hurricane Helene, disaster relief was essential for rebuilding our community. Every dollar of that money should have gone to those that needed it," Ferguson stated. He added that Cantrell "stole that taxpayer money — and committed her fraud while she was in jail," underscoring the severity of the offense. Ferguson affirmed his office's commitment to prosecuting individuals who exploit federal programs.
According to court records, Cantrell initiated her fraudulent claims on or about February 22, 2025. She filed an application for disaster assistance with FEMA, asserting that a dwelling located at 193 Beaver Creek Road in Marion was her primary residence, which she rented, and that it had been destroyed by Hurricane Helene in September 2024. Days later, on or about February 27, 2025, Cantrell falsely amended her application to claim ownership of the damaged dwelling. The following day, February 28, 2025, she falsely represented to a FEMA inspector that she owned the destroyed residential trailer, though not the land upon which it was situated.
Contrary to all her assertions, court records indicate that Cantrell never resided at, rented, or owned any residence or structure at the specified location. Furthermore, no dwelling existed at that address when Hurricane Helene struck the area. A critical detail revealed in court records is that at the time Hurricane Helene affected Western North Carolina, Cantrell was an inmate with the North Carolina Department of Adult Corrections, thereby unaffected by the storm.
In March 2025, Cantrell submitted a handwritten letter to FEMA, falsely attesting that the information she had provided was "true and correct." In this letter, she falsely claimed to have purchased the dwelling for $8,500 and to have lived there for 25 years. She also falsely stated that all her important personal documents "got washed away by Hurricane Helene." That same month, FEMA disbursed funds based on her false claim, wiring $30,631.59 to Cantrell.
Cantrell pleaded guilty to fraud in connection with major disaster or emergency benefits in October 2025. She is currently held in federal custody, her bond having been revoked due to drug use. Upon designation of a federal facility, she will be transferred to the custody of the Federal Bureau of Prisons.
U.S. Attorney Ferguson commended the U.S. Department of Homeland Security, Office of the Inspector General, and FEMA's Fraud Investigations and Inspections Division for their diligent investigation of the case. Assistant U.S. Attorney Don Gast of the U.S. Attorney's Office in Asheville prosecuted the matter.
This case aligns with broader federal efforts to combat fraud. On April 7, the Department of Justice announced the establishment of the National Fraud Enforcement Division. This division is tasked with investigating and prosecuting fraud committed against the American public and supports President Trump's Task Force to Eliminate Fraud, an initiative chaired by Vice President J.D. Vance, focused on eradicating fraud, waste, and abuse within federal benefit programs.
