Hurricane Katrina victims defraud federal government and charities

By Ashley Cook
April 19, 2007

Dallas Morning News/MCT

Thousands of people are being charged with defrauding the federal government and charities for Hurricane Katrina victims out of hundreds of millions of dollars, according to Associated Press. More than 18 months after Hurricane Katrina decimated the Gulf Coast, the frauds range in value from a few thousand dollars to more than $700,000.

Besides false claims, types of fraud include extortion, bank larceny, over-billing, public corruption, identity theft and using fictitious social security numbers or those of the deceased. According to Associated Press, David Dugas, U.S. attorney in Baton Rouge, La, says about 150 to 250 complaints still come in each week and more than 9,600 possible fraud cases have been referred to investigators.

“The criminals saw money flowing through the streets of New Orleans, not devastating sewage-infected water,” Kristen Catalanotto, a 2006 Cabrini alumna, said.

According to MSNBC, reports released by the Government Accountability Office and the Homeland Security Department’s Office of Inspector General detail a series of accounting flaws, fraud or mismanagement in their initial review of how $85 billion in federal aid is being spent.

The Federal Bureau of Investigation has cases upon cases of Hurricane Katrina fraud covering dates that span as far back as September 2005.

The Federal Emergency Management Agency’s first investigation of their paying benefits to Hurricane Katrina victims indicate massive fraud and millions of dollars of taxpayer money wasted, according to MSNBC.

FEMA’s emergency cash assistance program, which included the $2,000 debit cards given to evacuees, was based on duplicate or invalid social security numbers, or false addresses and names. The General Accounting Office found “significant fraud and abuse.” Investigators studied more than 200 cases, and say in 70 percent of them, aid recipients gave bogus social security numbers, numbers that belonged to dead people, to someone else or to no one at all, according to Associated Press.

“If the Gulf Coast were adequately prepared for the hurricane, these discussions of fraud would be less common or even non-existent,” Darryl Mace, assistant professor of history and political science, said.

According to the report, FEMA did nothing to verify the identity or address of hundreds of thousands of aid recipients. FEMA said about 60 percent of Katrina disaster aid requests came by phone and were a major source of false claims.

More then 600 scammers have been charged in federal cases in 22 states, from Florida to Oregon. The District of Columbia is also included in these trials. These imposters are employees from places such as the FEMA, the Army Corps of Engineers, temporary workers of the Red Cross, business owners and other public officials.

“The Red Cross quickly gave out debt cards with $300 the week Katrina hit, so I’m not sure exactly where all the millions of dollars are going,” Catalanotto said.

“This report shows that criminal elements exist in all areas of this country,” Mace said. “That socioeconomic standing does not affect a person’s moral


Hired to authorize cash payments to storm victims, 104 employees from The Red Cross allegedly helped family and friends file phony claims; 86 have been convicted so far. Some 2,500 other fraud cases representing about $5 million in losses have been referred to law enforcement as potential cases to prosecute, and there are nearly 21,000 allegations totaling another $34 million, according to Associated Press.

“The problem, once again, is that FEMA failed to prepare for the very type of disaster that happens every year,” Sen. Susan Collins of Maine said. “This pay first, ask questions later approach has been an invitation to unscrupulous behavior,” according to MSNBC.

“I think it’s a shame that people would kick others when they are already down for the count,” Catalanatto said. “Unfortunately, money rules the world and makes people do greedy things, whether it is stealing a few thousand dollars or a few hundred thousand dollars, it’s still wrong.”

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Ashley Cook

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