Katrina fraud believed widespread
Hundreds across US face charges
NEW YORK -- An Illinois woman mourns her two young daughters, swept to their deaths in Hurricane Katrina's floodwaters. It's a horrifying story. It's also a lie.
An Alabama woman applies for disaster aid for hurricane damage. She files 28 claims for addresses in four states. It's all a sham.
Two California men help stage Internet auctions designed to help Katrina relief organizations. Those, too, are bogus.
More than 18 months after Hurricane Katrina tore through the Gulf Coast, authorities are chipping away at a mountain of fraud cases that, by some estimates, involve thousands of people who bilked the federal government and charities out of hundreds of millions of dollars intended to aid storm victims.
The full scope of Katrina -related fraud may never be known, but this much is clear: It extends far beyond the Gulf Coast, like the hurricane evacuees themselves. More than 600 people have been charged in federal cases in 22 states -- from Florida to Oregon -- and the District of Columbia.
The frauds range in value from a few thousand dollars to more than $700,000. Complaints are still pouring in and several thousand possible cases are under review -- enough work to keep authorities busy for five to eight years, maybe more.
"The reason we're seeing such widespread fraud is individuals were evacuated to all 50 states. Katrina was a national phenomenon," said David Dugas, US attorney in Baton Rouge, La., and director of a command center that is part of a special Hurricane Katrina Fraud Task Force. "Everybody knew what was going on. Therefore, criminals knew what was going on."
Major disasters and fraud frequently go hand in hand. It happened after the Sept. 11 , 2001, terrorist attacks and Hurricane Andrew's devastating sweep through Florida in 1992. People tried to cash in, falsely claiming to be victims.
After Katrina, the same thing happened: Disaster aid was sent to inmates who applied from prison and to people who claimed property damage and provided addresses of vacant lots or cemeteries, among many abuses documented in Government Accountability Office reports.
"We found several dozen schemes. There are probably a lot more out there," said Gregory Kutz, a GAO investigator who has testified about Katrina -related fraud six times on Capitol Hill. "The real clever ones cover their trail and disappear and they'll never be caught."
While many people filed bogus claims, the growing roster of the accused goes beyond the usual con artists. It includes employees of the Federal Emergency Management Agency, and the Army Corps of Engineers, other public officials, business owners, and temporary workers for the Red Cross.
The GAO has referred more than 22,000 potential cases of fraud to the Katrina task force, though Dugas says the majority probably will not pan out. In a recent audit, the GAO concluded that FEMA had recovered less than 1 percent of some $1 billion investigators say was fraudulent aid.