Katrina fraud swamps system

[snopes]

Federal agents investigating widespread fraud after the Gulf Coast hurricanes in 2005 are sifting through more than 11,000 potential cases, a backlog that could take years to resolve.

Authorities have fielded so many reports of people cheating aid programs, swindling contracts and scamming charities after the hurricanes that Homeland Security inspectors, who typically police disaster aid scams, have been "swamped," says David Dugas, the U.S. attorney in Baton Rouge.

http://www.usatoday.com/news/nation/...na-fraud_N.htm

[Helo]

http://www.usatoday.com/news/nation/...na-fraud_N.htm

Other cases auditors had criticized — people spending aid money on jewelry or vacations — turned out not to be a crime, because federal law doesn't specify how the money must be spent, Dugas says.

I loved that quote. I'll have to bear that in mind when London gets flooded like the rest of the country and I get my windfall.

Is this related to that UL in which people were going into Versace, Armani and the like with their "Charity" credit cards and buying purses/clothes etc.?

The fraud problem is not with people who had a valid claim (although it would be intelligent to use it to buy an inexpensive vehicle, food, clothing, shelter, etc; nothing says that they MUST use it that way). The issue is with people who did NOT have a valid claim getting cards (people who did not leave near the affected area, whose homes were not flooded/damaged, etc).

[Malruhn]

My mother worked with FEMA for the past two years - and although I don't know about people walking into ritzy stores with their bail-out money, I can verify (through her) that people living in FEMA trailers bought huge stereos, 45+" Plasma TV's and brand new cars on their benefit money.

And then got pissed at the government when they asked if they had used any of the money to set up new housing...

[Elkhound]

Originally Posted by Helo

I loved that quote. I'll have to bear that in mind when London gets flooded like the rest of the country and I get my windfall.

Is this related to that UL in which people were going into Versace, Armani and the like with their "Charity" credit cards and buying purses/clothes etc.?

Actually, it isn't entirely a UL. Things like that happened here in WV. The people who were given shelter at the NG camp were told that they could not bring liquor onto the base, but what did many of them do? Went into the nearest town and bought booze. Which was siezed by the guards.

[AnglRdr]

Originally Posted by Malruhn

And then got pissed at the government when they asked if they had used any of the money to set up new housing...

When would the government have asked them that question? Was such a condition made prior to survivors receiving their cards? How much was typically given to an individual/family on such a card? What about other forms of government relief?

[kismet]

The behavior of buying expensive items with a windfall and then having nothing for necessities is not unique to katrina victims. People who live in generational poverty do not learn to save for a rainy day, because there's rarely enough to save and it's always a rainy day.

So they tend to spend what they have when they have it. Buying a Playstation one month and selling it three months later for a fraction of its cost to buy groceries and doing without electricity. This is not the most financially advantagous way to handle money, but if there has never been much money for generations it is hard to expect parents to provide the kind of financial education that would explain how and why to save.

The Katrina victims that came to Houston were the very poorest of the poor, and in NO that was saying something. They did not have the option of going back home with the money, so they bought the things they wanted most with it instead.

[Malruhn]

Originally Posted by AnglRdr

When would the government have asked them that question? Was such a condition made prior to survivors receiving their cards? How much was typically given to an individual/family on such a card? What about other forms of government relief?

Hey, AnglRdr, long time to argue with!!

I just talked to Mom. Her job was to get people out of the FEMA trailers. The average federal government payout to these people was over $19,500 in total grants, cards, etcetera. Like Kismet said, there were lots of tiny trailers with 60" plasma TV's - and nobody looking for apartments and other forms of housing. She was told repeatedly - and on a daily basis - that since the government told them that they couldn't go back to their destroyed house, that the government should pay them to live free forever.

The kicker is that my mother actually makes YOU seem like a staunch conservative Republican... she is THAT far to the left. She has been shocked into adjusting some of her opinions. The total lack of initiative to take care of THEMSELVES in most of these cases is what has really turned her around.

Yes, she saw some horror stories that turned themselves right - like a single welfare mom with eight kids - that got money for each kid - and ended up being able to put a down-payment on a house in Shreveport, Louisiana, and bought a used minivan... and then tried to give some of the money back to my mom... as if she personally had awarded it to her. But even my mother admits that this and similar stories are anecdotes.

[AnglRdr]

But what business would the government have to ask them if they'd spent their relief money on setting up new housing? There were no funds, as far as I am aware, given by the government that were only to be used to set up new households.

Don't get me wrong, poor money management is endemic in the United States, and I would imagine, as Kismet said, a sudden windfall of money only helps to exacerbate poor money management.

When I was working with Katrina survivors, the amounts of money were pretty miniscule, so much so that people who managed well were still having a difficult time managing security deposits and such like for apartments locally.

[Helo]

Originally Posted by AnglRdr

But what business would the government have to ask them if they'd spent their relief money on setting up new housing? There were no funds, as far as I am aware, given by the government that were only to be used to set up new households.

Ok, but look at it from this point of view.

You've just given a family member who was regretfully damaged badly by Katrina. You then see them buying a 60" Plasma TV and all sorts, now do you A. Think this is ok for them to be living in a dump, but have kewl toys, or B. Get pissed because they've basically wasted the money?

If the NFBSK hits the fan in London and the flooding does happen, and I get money to relocate, you can bet your ass I ain't get a 60" PTV until I've got somewhere decent to put it...

[AnglRdr]

How do we know they aren't replacing a 60" plasma that was destroyed by the flooding?

My point is this: the money was not given with restrictions on how it is spent. It isn't my business to be "pissed" about how they spend it. It is theirs to do with as they please. Perhaps I would recommend an alternative if they were friends, but since I only got to know a miniscule number of the displaced, that is unlikely.

However, knowing the amounts the average Katrina survivor/refugee received, buying a 60" plasma was out of the realm of the possible.

What I am pissed about is that the situation got so FUBAR'd in the first place.

[woodness03]

Originally Posted by AnglRdr

How do we know they aren't replacing a 60" plasma that was destroyed by the flooding?

You do not really believe that, do you?

Anyways, I think people are getting confused with fraud and personal money mis-management. Buying a plasma TV with the money received is not fraud, just plain stupid; and by doing so, IMO, you now have no leg to stand on to say the government is not helping you

[hoitoider]

In the traumatic days after Hurricane Katrina, Louisiana Gov. Kathleen Babineaux Blanco turned to one of the most respected names in emergency management: James Lee Witt, the so-called Master of Disaster. But an eight-month investigation by NBC News into the performance and billing practices of Witt’s firm, James Lee Witt Associates, raises questions about profiteering, cronyism and possible falsification of records by one of Witt Associates’ subcontractors.

http://www.msnbc.msn.com/id/19918356/

[AnglRdr]

Originally Posted by woodness03

You do not really believe that, do you?

It was a hypothetical. However, I do believe, given the law of averages, that there was at least 1 60" plasma that was destroyed by flooding and replaced with relief funds.

Anyways, I think people are getting confused with fraud and personal money mis-management.

That was really my point, far better worded. Considering the massive numbers of claims filed, I think 11,000 potential fraud cases is not out of the realm of the reasonable (if there is such a thing as a reasonable expectation of fraud).

Buying a plasma TV with the money received is not fraud, just plain stupid; and by doing so, IMO, you now have no leg to stand on to say the government is not helping you

While I agree with the first clause of this statement, there isn't really anything that would support the second clause is occurring.

[woodness03]

Originally Posted by AnglRdr

While I agree with the first clause of this statement, there isn't really anything that would support the second clause is occurring.

After re-reading my statement, I agree with you. I probably could have worded it better, so let me give it a shot.

Buying a plasma TV with the money received is not fraud, just plain stupid; and by doing so, IMO, it becomes more difficult to accuse the government of doing nothing to help you.

I have heard people say tha the government is not helping them. I would be curious to see what they spent their money on. I do believe the government could have done more and managed the situation A LOT better, but some responsibility still needs to be on the person(s) who showed mis-management of the money.

Personally, I think Katrina was handled extremely poorly by all levels of government (local, state, and federal) and the situation that existed, and still exists today, is a direct result from that failure on all three levels of government and the reason why we saw a lot of fradulaent claims