Justice Department Says Over 1,300 Charged With Katrina Fraud

September 16, 2010

More than 1,300 people have been charged in federal fraud cases related to the 2005 hurricanes in the five years since the storms struck the Gulf Coast, the Justice Department said Tuesday.

A report released by the Hurricane Katrina Fraud Task Force says investigators have screened more than 39,000 fraud-related tips and complaints since the 2005 storm season. As of Sept. 1, 1,360 people have been charged in federal courts with fraud related to hurricanes Katrina, Rita or Wilma, the report says.

Most of the cases have involved attempts to fraudulently obtain disaster aid from the Federal Emergency Management Agency and the American Red Cross. But the task force’s report also touted its prosecutions of identity theft, procurement fraud and public corruption.

Many people managed to fraudulently obtain money from FEMA and the Red Cross due to their “absence of effective fraud-prevention internal controls and measures,” the report says. But the task force credits both agencies with improving their abilities to root out possible fraud.

“While it is always vital in any disaster to provide prompt financial support to victims whose jobs or businesses have been severely affected by the disaster, a balance also must be struck between speed of payment and effective measures to verify identities and other information that claimants provide,” the report says.

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