It could very well be considered fruad.
If the grounds on recieving the house was clearly stated as for people to live in the area, rebuild their lives, etc. And they did it with no intention of doing so and flat out lied, thats fruad.
Where was this "clearly stated"? Was it in the contract? Was there a deed restriction? Apparently not, so tough cookies. It's not fraud
It's the same as applying for welfair when you have a million dollars burried in your back yard, or taking katrina aid when you lived in Omaha and just had a vacation place in the effected area. If you lie in order to get something with a pretty clear purpose, its fraud.
When did they lie? They were refugees, they needed a house, and when they got one they used the proceeds to return to NOLA. You need to go review the prima facie elements of fraud.
Then agian IANAL and its my personal opinion.
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