FEMA Seeks Return of Close to $5.8M in Sandy Aid

After Superstorm Sandy hit the East Coast nearly two years ago, the federal government quickly sent out $1.4 billion in emergency disaster aid to the hurricane’s victims.

Now, thousands of people might have to pay back their share.

The Federal Emergency Management Agency is scrutinizing about 4,500 households that it suspects received improper payments after the storm, according to program officials and data obtained by The Associated Press through a public records request. As of early September, FEMA had asked around 850 of those households to return a collective $5.8 million. The other cases were still under review.

FEMA’s campaign to recover overpayments, called “recoupment” in agency lingo, typically involves inadvertent violations of eligibility rules, bureaucratic mistakes or missing documentation, rather than outright fraud.

Many people asked to return money were deemed ineligible because their damaged properties were vacation houses or rental properties, not their primary residences. Others had double dipped into the aid pool, with more than one household member getting payments. Some received FEMA money for things later covered by insurance.

As of July 30, the average demanded refund was $6,987, a sum that could be difficult for many, given the modest annual incomes of most aid applicants. Roughly half of the households under scrutiny reported an annual gross income of $30,000 or less.

The larger pool of cases still under review as of that date involved $53 million in aid payments – or about 3.7 percent of the total given out by FEMA through its individuals and households program – though any potential refunds would likely involve only a portion of that money.

“For most people, the money is long gone and long ago spent on storm recovery,” said Ann Dibble, director of the New York Legal Assistance Group’s storm response unit, which has been helping about a dozen families fight a FEMA clawback.

The list of people asked to return cash includes Gary Silberman of Lindenhurst, New York, who got a letter last November demanding just under $17,000. The agency said he was ineligible partly because he and his elderly father had both applied for disaster funds even though they were living together.

The Silbermans also were barred from getting some types of aid because they had failed to buy flood insurance after getting $25,000 in FEMA aid for flood damage during Hurricane Irene a year earlier.

Silberman says he should still qualify for the money because he was a rent-paying tenant in his father’s house, not a dependent, but FEMA has so far rejected his appeals.

“I lost my home. I lost everything. I don’t have $17,000 to give back,” Silberman said.

Sandy was among the costliest hurricanes in U.S. history. More than 280 people died in the U.S. and the Caribbean. When the storm struck the New York and New Jersey coastlines, the surging ocean poured into densely populated seaside neighborhoods and turned entire communities into soggy, moldy wrecks.

About 179,000 households in New York and New Jersey received FEMA payments following the storm. The agency is also reviewing payments to some households in Connecticut, Maryland and Rhode Island.

FEMA mobilized for Sandy hoping to avoid problems that plagued the aid distribution process following Hurricane Katrina’s strike on the Gulf Coast in 2005. That destructive storm forced the overwhelmed agency to relax internal controls to speed up relief efforts, which led to huge numbers of people getting money they shouldn’t have received.

FEMA’s attempts to recover hundreds of millions of dollars, often from people who couldn’t afford to pay, led to a court fight and a procedural overhaul. By 2011, the agency had mailed out letters to at least 90,000 households asking for aid refunds. Congress authorized the agency to waive much of that debt.

The agency says it has since gotten better at making sure aid only goes to the right people, and in proper amounts.

“They have a lot more controls in place,” said John Kelly, the Department of Homeland Security’s assistant inspector general for emergency management oversight.

(Kunzelman reported from Baton Rouge, La.)