Task Force Report: 400 Charged with Hurricane Relief Fraud

The federal charges were filed in 30 federal districts in all regions of the United States, according to the report. State and local prosecutors’ offices also have continued to bring criminal cases involving hurricane-related fraud, the report says.

“To take advantage of the devastation and recovery efforts in the Gulf Coast is both shameful and illegal,” U.S. Attorney General Alberto Gonzales said. “We must ensure that the criminals who have exploited this time of human suffering are brought to justice, and that their crimes do not undermine the programs intended to rebuild the homes, businesses and communities destroyed by Hurricanes Katrina, Rita and Wilma. The Department of Justice will continue to vigorously investigate and prosecute fraud, in whatever form it may take, and work with our partners to prevent fraud in the future.”

More than 170 members of federal, state and local law enforcement met Sept. 13 in New Orleans for the inaugural conference of the Hurricane Katrina Fraud Task Force, a multi-agency national task force led by the Department of Justice to crack down on fraud in the aftermath of Hurricanes Katrina, Rita and Wilma.

2.5 Million Hurricane Relief Applications Received

The task force reported that as of Aug. 17, FEMA had received more than 2.5 million applications for disaster assistance relating to Hurricanes Katrina and Rita.

While the vast majority of those applicants had legitimate need for the assistance they sought, according to the task force, numerous people committed fraud in seeking benefits to which they were not entitled. The task force report asserts that “fraud follows the money” – meaning that criminals tended to exploit any situation with the prospect of personal financial gain.

Examples of hurricane-relief fraud capers, in the first cycles immediately following the hurricane, included charity fraud schemes, emergency assistance schemes such as the false applications for FEMA benefits and procurement and insurance fraud, according to the task force.

The task force says it is focusing on investigations into government-contract and procurement fraud, public corruption, government and private-sector benefit fraud, identity theft and false charities.

More than $18.2 Million in Bilked Funds Returned

The task force’s Joint Command Center, established in Baton Rouge, La., following Hurricanes Katrina and Rita and headed by U.S. Attorney David Dugas of the Middle District of Louisiana, has reviewed and analyzed more than 6,000 fraud-related tips and complaints in the 1 year since Katrina, according to the task force report.

According to the task force, FEMA and the American Red Cross are reporting that more than $18.2 million in assistance funds have been returned to the agency as a result of the task force’s efforts.

The task force’s report also includes recommendations for suggested best practices for law enforcement after future disasters. These recommendations include:

• Pre-disaster preparation such as standardized training in disaster relief programs and the fraud typically associated with those programs;
• Public outreach to prevent and deter fraud in the event of a natural disaster;
• The creation of district and multidistrict working groups, protocols for data sharing and data management; and
• The establishment of Joint Command Centers to gather data, share information and coordinate fraud investigations.

The Hurricane Katrina Fraud Task Force’s “First-Year Report to the Attorney General” is available online at the Department of Justice Web site.