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1.4 Billion scammed from Katrina relief funds

Post-Katrina Fraud Relief Funds 2006

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#1 Spectacles

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Posted 14 June 2006 - 07:24 AM

After the particularly bad 2004 hurricane season in Florida, similar scams were run. FEMA said they investigated them and made changes in the reporting system to prevent future scams.

So now unscrupulous people have bilked the taxpayers out of 1.4 billion dollars by filing false claims in the aftermath of Katrina. FEMA is making changes in the reporting system to prevent future scams--again. We should all feel much better.  :sarcasm:

http://news.yahoo.co...zkxBHNlYwN0bQ--

Quote

WASHINGTON - The government doled out as much as $1.4 billion in bogus assistance to victims of Hurricanes Katrina and Rita, getting hoodwinked to pay for season football tickets, a tropical vacation and even a divorce lawyer, congressional investigators have found.

Prison inmates, a supposed victim who used a New Orleans cemetery for a home address, and a person who spent 70 days at a Hawaiian hotel all were able to wrongly get taxpayer help, according to evidence that gives a new black eye to the nation's disaster relief agency.

Federal investigators even informed Congress that one man apparently used FEMA assistance money for a sex change operation.

Quote

To dramatize the problem, GAO provided lawmakers with a copy of a $2,358 U.S. Treasury check for rental assistance that an undercover agent got using a bogus address. The money was paid even after FEMA learned from its inspector that the undercover applicant did not live at the address.

Quote

FEMA also could not establish that 750 debit cards worth $1.5 million even went to Katrina victims, the auditors said.

Among the items purchased with the cards:

_an all-inclusive, one-week Caribbean vacation in the Punta Cana resort in the Dominican Republic.

_five season tickets to New Orleans Saints professional football games.

_adult erotica products in Houston and "Girls Gone Wild" videos in Santa Monica, Calif.

_Dom Perignon champagne and other alcoholic beverages in San Antonio.

_a divorce lawyer's services in Houston.

"Our forensic audit and investigative work showed that improper and potentially fraudulent payments occurred mainly because FEMA did not validate the identity of the registrant, the physical location of the damaged address, and ownership and occupancy of all registrants at the time of registration," GAO officials said.

How stupid is that?

People received money from submitting P.O. Boxes as "damaged addresses."

One person used thirteen social security numbers to receive damage assistance on thirteen different properties--none of which belonged to him.

How hard can it be to check out recipients before issuing them disaster relief? I mean, doesn't FEMA have access to computers and data bases? What on earth accounts for this kind of incompetence and gross mismanagement of resources?

Meanwhile, some of the victims of Katrina waited months and months for relief.

But, FEMA says that the bugs have been worked out--again--and they're ready for this hurricane season. So I guess we should all relax.  :Oo:

Edited by Spectacles, 14 June 2006 - 07:24 AM.

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#2 veganmom

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Posted 14 June 2006 - 09:42 AM

Still love that Colbert quote, Specs!!!!

They should track down and prosecute every single one of these people. I don't mind my tax dollars going to that. Those people should also be held financially responsible for expenses involved in tracking them down and prosecuting them.

Then use the recovered money for this hurricane season, or to really rebuild the area.

#3 Natolii

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Posted 14 June 2006 - 09:53 AM

My friend's house is still in need of repair. The foundation alone requires $65,000 in repairs due to flooding. The water erroded the ground shoring up the house and the house is now at a 10 degree tilt...
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#4 Zwolf

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Posted 14 June 2006 - 10:04 AM

I hope they catch those scammers and put 'em to work fixing everything in Louisiana as their community service.  They can stop when everything's fixed.

Fema got sloppy with those cards.  My mom was volunteering at one of the relief centers soon after Katrina and she said people were getting thrown out right and left for trying to pull scams, but just as many got through as got caught.   They've got to find some better way to help those people rather than just tossing out credit cards like Mardi Gras favors...

Cheers,

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#5 CJ AEGIS

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Posted 14 June 2006 - 10:06 AM

Iíd like to see anyone propose a system that can track people who are scattered all over the nation from an entire section of several states.  Then that same system has to tie them to their original address and confirm that they are the same person.  Then it has to track exactly what they spend their relief checks on once they receive the money.  Then this database would have to be setup and prepped to potentially track any person in the United States who is displaced by a disaster.  First it would be a massive invasion of privacy that would make even the worse claims about the Patriot Act look pathetic.  Second it would be near physically impossible to track and ID every person displaced over an entire country unless you send a person out to ID every person.

Probably some of it probably has to with the fact that FEMA had people of every stripe breathing down their collective necks that their initial response as too slow and they needed to do everything quicker.  I can just imagine what the reaction would have been if FEMA took several extra weeks to check the addresses and do a through small background of every person that they were sending relief to.  A database is a great idea when you are dealing with a few thousand people and a small area destroyed.  When you are dealing with the numbers we had from Katrina to do that would be next to impossible if you were aiming for a reasonable amount of time.  Remember that we have no national system for identifying all people so you would have to pull in information and check dozens to hundred of databases.  

Now 1.4 billion dollars is a ridiculous number to be scammed for even with all the chaos and calls to hurry up the process.  Iíd be curious what the total figure paid out to people including that 1.4 billion was?  Remember when dealing with massive amounts of money even a small failure rate of 1% can end up with you losing massive amounts of money to fraud.  You will never eliminate that error totally so when you are dealing with massive amounts you will lose a lot of it to waste. Something needs to be done to cut the number down massively but it doesnít surprise me that we had such a high number since this was the first time such a disaster of this scale has happened in the US in the modern period.  We all need to look at the scale of what happened and consider the scale of developing systems to deal with it.  Now being ripped off to an amount of around 100 million would be a little more acceptable number.  Especially if you aggressively followed the paper trail following the disaster and nailed those people.
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#6 Mark

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Posted 14 June 2006 - 10:20 AM

Mark:  :grr: Hunting down and prosecuting these low-life scum, and getting our money back sounds real good.
However, I'd be willing to bet most of the offenders wouldn't have the money to pay us back with (perhaps have never had that much money), and then would suck more money out of taxpayer's pockets to keep them jailed.

There's an old sayin'...."Hangin's too good fer 'em"! I think that statement is true about anybody who would attempt to, and/or actually cash-in on a national disaster. Oh, I think we should definitely find out who they are, but just put eyes on their business transactions, bank accounts, assets, and comings and goings. Then one day, or night, (when they least expect it) sock-it-to-'em!
Many will probably re-hang themselves through dirty dealing, anyway. So one day when they really, really, need something (like a get out of jail card, or return flight to the U.S.) or try to scam again...vengeance will then be had by the law-abiding tax payers, and of course (and including) the real victims of the Hurricanes. It will be so much sweeter to remove the laws applying to statutes of limitations regarding this matter, and letting part of their punishment be the circumstances they happen to be in at the time.
:ninjadeath:

Edited by Mark, 14 June 2006 - 10:22 AM.

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#7 veganmom

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Posted 14 June 2006 - 10:31 AM

Can't people be found from their tax returns? That would be a pretty good percentage.

#8 Shalamar

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Posted 14 June 2006 - 10:39 AM

What CJ  said

What Mark said

Both of them hit the nail on the head-  problem and solution.

oh and just a question- how many of us here will admit to screaming at Fema to move faster and do more back in the aftermath of the hurricane. I could look it up in our old threads but I'm lazy...
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#9 Tricia

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Posted 14 June 2006 - 11:23 AM

View PostMark, on Jun 14 2006, 03:20 PM, said:

Mark:  :grr: Hunting down and prosecuting these low-life scum, and getting our money back sounds real good.
However, I'd be willing to bet most of the offenders wouldn't have the money to pay us back with (perhaps have never had that much money), and then would suck more money out of taxpayer's pockets to keep them jailed.

Since they had such specific examples of how the money was misused...then they no doubt have at least those particular individuals either in custody or served already.  

And they can make them repay this amount ....thru wage garnishment (if allowed in that state or even if they have a job), liens (against tax returns or even possibly property), as well as making it so they can not collect any government benefits  such as food stamps, SS benefits or AFDC (or whatever it is called now)..

Not sure if any of those solutions are possible in reality or if they should go further.

FEMA has demanded repayment of funds used for housing for people who should not have been approved for that aid several months ago but I have never heard how far they have taken that issue.

I have to admit that I was one of the ones yelling but they still could have done this in a much better way.   Why not ask for more proof of residency or do more fact checking?  In this day of the Internet how hard would it have been to confirm residency or the existence of an address thru tax records, or something like that?  

I have seen reports on the local news in the past where they could find out practically a person's whole history simply with their SS number, DL number, or even license plate number.  And sometimes quite a lot just with their name.

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#10 Shalamar

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Posted 14 June 2006 - 12:47 PM

How many of those people pouring out of New Orleans alone had ID with them, much less multiple forms of ID.

also many of the ways to find out someones stuff on the internet takes more training than I bet those manning the desks had, even if they had computers to do a search with.

I know that the first days to weeks were very confused, those manning the desks were overwhelmed and faced with people who had lost everything and thus were on the ragged edge of breakdown.

also any even semi professional scammers who went into those lines know the techniques to get past basic checks, and they were probably the ones who had the best and most complete looking documentation.
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#11 Spectacles

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Posted 14 June 2006 - 01:12 PM

I was one of the ones doing some yelling at FEMA after Katrina. And I'm still yelling. ;)

This isn't a new story, and it isn't confined to Katrina. There was a huge investigation of FEMA's honoring fraudulent claims in Florida after the awful hurricane season there in 2004.

http://www.sun-senti...0,4489561.story

Quote

FEMA disaster aid operations tightened after Frances



By Sally Kestin and Megan O'Matz
Sun-Sentinel
Posted August 6 2005

  
Federal officials announced sweeping changes Friday in how they verify damages and award aid to disaster victims in response to a U.S. Senate investigation into widespread fraud and waste in Miami-Dade County after Hurricane Frances last year.

Damage inspectors will undergo more training and greater scrutiny of their work under reforms implemented by the Federal Emergency Management Agency. People appealing for federal help will be reimbursed only for items such as clothing that are "clearly destroyed, physically gone or contaminated."

Granted, Katrina hit a month later and there was probably no time to implement these changes. My point, however, is that though Katrina was a massive catastrophe, FEMA already had a history of awarding claims that just about anyone with good sense should have realized were fraudulent. For instance, they paid for funerals after Frances--but no one died.  :eek4: No one's privacy needed to be violated to make that assessment.

We desperately need a Federal Emergency program that provides relief to those who need it and keeps the sociopaths among us from ripping off taxpayers to the tune of billions of dollars. FEMA isn't doing so well on either count.

More links on the Florida scams:

http://www.house.gov...defrauders.html


http://billnelson.se....cfm?id=244654


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#12 Balderdash

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Posted 14 June 2006 - 01:14 PM

View PostShalamar, on Jun 14 2006, 10:47 AM, said:

How many of those people pouring out of New Orleans alone had ID with them, much less multiple forms of ID.

also many of the ways to find out someones stuff on the internet takes more training than I bet those manning the desks had, even if they had computers to do a search with.

I know that the first days to weeks were very confused, those manning the desks were overwhelmed and faced with people who had lost everything and thus were on the ragged edge of breakdown.

also any even semi professional scammers who went into those lines know the techniques to get past basic checks, and they were probably the ones who had the best and most complete looking documentation.

What Shalamar said.  Also, I survived Katrina, I live here, there are still people waiting for FEMA to get off their duffs and do something right.  So far NOLA has barely been touched and St. Bernard Parish is still a pile of rubble.  

In the beginning those of us who stayed near home were totally without any kind of information, everything was word of mouth.  My family in Maryland, my friends, internet friends didn't know if I was alive or dead for a week.  FEMA had to work fast because we were in need, desparate need.  I know that there are those that took advantage of the situation and they should be punished as harshly as the law allows.  And FEMA needs someone at the helm that can cut through the damnable red tape that has people still waiting for help.  The whole damn thing is rediculous and I put the blame right where it belongs with our glorious leader who decided that cronism (sp) was more important than getting someone who could handle the situation.

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#13 Lord of the Sword

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Posted 14 June 2006 - 07:11 PM

View PostShalamar, on Jun 14 2006, 11:39 AM, said:

oh and just a question- how many of us here will admit to screaming at Fema to move faster and do more back in the aftermath of the hurricane. I could look it up in our old threads but I'm lazy...

I have to admit...I was one. And I still feel that way. You can't tell me that several reporters can manage to set up their equipment, broadcast a news report, in the aftermath...and FEMA can't get down there faster? No way. Don't buy it.

As for them getting scammed...No system is perfect. Although I would've expected them to have better safeguards...

As for those that committed this fraud.....Why I'd like to....*Boardguidelines step in and  :censored:  :chair:  :nono:  :chair: *

Well I can't say what I'd like, but they definately need to be dealt with as harshly as the law permits.
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#14 G1223

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Posted 15 June 2006 - 02:54 AM

Well first those reporters are not having to stop at the first area where there are refugees grouping up at. They do not need to ask those people what they might need or get out of their trucks. They just need to find a place where they can plug into their satellites and shout about how fast they got there and how FEMA was too slow.

But hey why ask the press what they might have done. They have a job telling us what FEMA did not do. Hell they do not need to report that some of the delays were due to the city and state being slow about getting the people out of the area. Or is that suddenly another job the Feds are suppose to do?

When is the state or city responsible for doing anything? That is short of crying and ringing their hands.
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#15 Tricia

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Posted 15 June 2006 - 05:43 AM

^^^Going a bit off topic and ...
Addressing the issues of city and state governments not doing anything about getting 1.5 million people out of harm's way....

The sad fact is that everyone...government officials at all levels included....do not always make a plan for events such as this.  Maybe I am wrong on this as I can only speak from my own experience or knowledge.

No one ever seems to think ahead and say...'hey what if the unthinkable happens?'

No they wait until it actually does...and then they try to change things.

Due to the Texas experience of dealing with massive amounts of people evacuating in advance of Hurrican Rita....which was not that long after Katrina....

They are actually working on an evacuation plan.  One that is not fully done yet but the lessons learned from both Hurricanes and the troubles with trying to evacuate are being used to develop a working flexible plan.  One that includes buses and making sure that the elderly and poor and those without transportation can get out.  Even those with pets who will not leave without thenm will have buses set aside for their use.  Of course it requires calling and setting up a pickup....but still it is a step in the right direction.

My point being?  It takes a disaster like this to make people even start to really think about it.  Hopefully lessons will be learned from what went wrong.  

Tho it was always a possibility that one day a hurricane would actually hit a major city....and there have been warnings for years...no one truly had a functional plan in place.

And you must take into consideration the fact that even with all the best laid plans in the world..there is the human factor.  The most unpredictable factor of all.  Even in the face of disaster and potential death...and with many options given to them to escape said disaster....you can not necessarily make people leave if they don't want to

Tho that may change in light of New Orleans...or it may not.

Now back to the real thread topic  ;)

Edited by trikay, 15 June 2006 - 05:46 AM.

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#16 Spectacles

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Posted 15 June 2006 - 07:18 AM

Quote

Trikay: Hopefully lessons will be learned from what went wrong.

Agreed, Trikay. We can all only hope so.

I think my frustration with FEMA--along with problems of state, local, and federal response to disasters--stems from my own, up-close contact with bureaucracies over the years.

Bureaucrats seem not to learn from mistakes because their primary response to them is to engage in CYA maneuvers to protect their positions. Add to that the usual political backscratching and finger-pointing (both in politics and in the workplace) and there's almost a guarantee that the underlying structural problems won't be changed.

The efficiency of an organization suffers when that happens. In the case of FEMA's repeated screw-ups, that inefficiency is costly to taxpayers and damaging to the real victims who genuinely need assistance.

I'm afraid I'm too cynical to see matters improving any. But I sure hope I'm wrong.

:(
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