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Assistance checks paid for a vacation, jewelry, a sex-change operation and more, the GAO reports. The fraud could total $1.4 billion.
I read shit like this and think, ‘what did you expect?’ This is a part of our country that has been glomming off of the rest of America for more than a century. Unemployment in and around New Orleans was more than 65% in the days before Katrina hit. These people have been pre-conditioned to be bottom feeders that think America owes them something because their great great great great great second cousin twice removed was a slave. So when the opportunity presents itself, people like that have no problem justifying their piss poor behavior as human beings ….. BECAUSE THE SAME POLITICAL HACKS THAT ARE COMPLAINING ABOUT IT IN WASHINGTON ARE GOING BACK TO THEIR DISTRICTS AND TELLING THESE LOSERS THAT THEY DESERVE ALL OF THESE FREEBIES IN THE FIRST PLACE!!! JD
By Johanna Neuman, Times Staff Writer
June 15, 2006
WASHINGTON — A Caribbean vacation. Pro football tickets. “Girls Gone Wild” videos. Fees for a divorce lawyer. A diamond ring. A sex-change operation.
This list is not a celebrity spending spree, but a chronicle of the fraud committed by Americans who said they were victims of Hurricane Katrina at a cost to the federal government of as much as $1.4 billion, according to a report issued Wednesday by the Government Accountability Office.
As many thousands attempted to recover from the loss of their homes in one of the greatest natural disasters to hit U.S. shores, con artists used false addresses — cemeteries, vacant lots and post office boxes — and fraudulent Social Security numbers, including some from the dead, to obtain rental assistance checks from the Federal Emergency Management Agency. Some of the fraud was committed from behind bars.
Others went on spending sprees with federal aid designed for immediate food, shelter and clothing.
The GAO assigned auditors to work undercover from February to June to test how easy it was to defraud the federal government. In its report, the GAO estimated that after examining a sample of 247 claims, 16% of FEMA’s assistance for housing and emergency provisions was misspent, for a total of $600 million to $1.4 billion lost in fraud.
During a hearing Wednesday before the House Homeland Security subcommittee on investigations, Donna M. Dannels, FEMA’s acting director for recovery, said the “questionable purchases” in the GAO investigation totaled “just under $8,000, or 0.02% of nearly $39 million” in aid.
As for the rental assistance checks, she argued that the fraudulent cases represented only “a fraction of the overall assistance provided” — $6.3 billion in housing payments distributed by the agency.
But her arguments did not sway legislators.
“This is an insult to the victims of Katrina and Rita,” said Rep. Michael McCaul (R-Texas), the panel’s chairman. “The ultimate victim is the American taxpayer.”
The committee’s top Democrat, Rep. Bob Etheridge of North Carolina, blamed the White House. “The administration’s irresponsible contracting processes and lax oversight have cost taxpayers billions,” he said.
Nor did Dannels’ statements impress the GAO. Sitting beside her during the hearing was Gregory Kutz, the agency’s managing director of forensic audits, who said FEMA was having trouble accepting the results because it had previously estimated the fraud rate at 2% to 3%, not 16% as the GAO now calculates.
Rep. Christopher Shays (R-Conn.) said the GAO report was so compelling, “I don’t think it’s refutable.”
During the hearing, FEMA was attacked for failing to impose controls or checks on the process. Dannels said the agency has taken a number of steps to reduce the potential for fraud, including a new system to verify the identity of individuals registering by telephone.
But McCaul and Etheridge both called for further investigations, this time into contract fraud. In Senate hearings this year, the U.S. government testified that it wasted $900 million on trailers that were too wide for housing-deprived flood zones.
The FEMA money was intended to help victims pay for food, housing, clothes and other essentials. The subcommittee said that based on the information in the GAO report, it has referred 7,000 cases to the Justice Department for prosecution.
In its report, the GAO found that prisoners applied for assistance from jail phones. Using false identities, they routed the assistance checks to the homes of relatives or friends. One inmate collected $20,000 using a post office box address.
A Texas man filed 19 applications and used the money for a sex-change operation. Elsewhere in Texas, a recipient used FEMA money to buy a diamond ring and other jewelry worth $3,700. FEMA gave an individual $2,358 in rental assistance while paying an additional $8,000 so that same person could stay at a Hawaii hotel for more than two months.
FEMA funds purchased a $2,200 weeklong vacation in the Dominican Republic and five season tickets to the New Orleans Saints. In Houston, federal money was used to buy sexual enhancement products and hire a divorce lawyer. And thanks to FEMA, someone in Santa Monica purchased $300 worth of “Girls Gone Wild” sex videos.
“There were no controls in place, and a clear lack of management,” said McCaul, who is pushing legislation that would require FEMA to set up a database to verify and cross-reference individuals and their Social Security numbers. “Americans have good reason to be angry. That’s why we held the hearing, to put some sunlight on it.”

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