Disaster Recovery Officials on the Prowl for Fraudulent Claims

Numerous federal agencies have dispatched teams of special agents to investigate fraudulent claims from Hurricanes Katrina and Rita, according to the U.S. Department of Homeland Security’s Federal Emergency Management Agency (FEMA).

“Managing a multimillion-dollar disaster program always means walking a fine line between speedy service to those who need it and ensuring that taxpayer dollars are not misused,” said Sandy Coachman, federal coordinating officer for FEMA.

False disaster claims or theft of government property, prosecuted by the U.S. Department of Justice, are felonies carrying maximum penalties of 10 years imprisonment or $250,000 fine-or both.

Through computer databases, informant tips and hotline tips, FEMA is receiving information of fraudulent claims. “Those who have made such claims, whether to FEMA or any other government entity, should take stock of their situation and seriously consider withdrawing their claims or voluntarily returning money already disbursed to them,” said Coachman.

FEMA officials urged victims of the storms to beware of suspected criminal activity involving disaster assistance programs.

The U.S. Department of Defense’s Office of Inspector General maintains a free fraud hotline, 866-720-5721, to receive reports of fraud from disaster areas. Service is available in English and Spanish.

Information also can be e-mailed to the inspector general at katrinafraud@dogig.mil, or sent by surface mail, with as many details as possible, to:

Hurricane Relief Hotline
Washington, D.C. 20301-1900

The Department of Justice Hurricane Katrina Fraud Task Force and Federal Trade Commission Consumer Response Center also will accept disaster fraud information. To provide information to the Justice Department, access the FBI’s Internet Crime Complaint Center at www.ic3.gov. The Federal Trade Commission accepts disaster fraud information on its toll-free line, 877-382-4357 or TTY 202-326-2502 for persons with speech or hearing impairment.

A number of computerized methods also are in place to detect fraud, including an automated system that crosschecks information with other agencies and insurance companies to find duplicate applications. The law prohibits duplication of benefits, such as receiving money from two sources for the same loss.

Field inspections are made of the damaged property of individual applicants to verify losses. Coachman said suspected cases of fraud or misuse are referred to the Justice Department for possible prosecution.

People who make a mistake when reporting damage, or who misrepresent their losses, have the opportunity to cancel their applications or amend their claims, she added. Individuals may call the registration number, 800-621-FEMA (TTY 800-472-7585), to withdraw or correct applications and avoid criminal charges.