FBI Uncovers Fraud in Miss., Creates Hurricane Task Force on Corruption

January 24, 2006

The FBI has uncovered fraud by public officials in the wake of Hurricane Katrina and has created a task force to investigate corruption as federal money pours into the Gulf Coast region, Mississippi’s top agent told The Associated Press.

“We are seeing public officials facilitating some of the fraud,” John G. Raucci, special agent in charge in Mississippi said. “It’s not widespread, I will say that, but we have seen it and we have begun addressing it.”

Raucci, speaking to the AP during a newsmaker interview in Jackson on Monday, cited FBI policy against commenting on pending investigations and declined to give specific details about the probes in Mississippi.

Sheila Thorne, a special agent in Louisiana, said the FBI has set up task forces in each of that state’s three districts to deal with hurricane-related fraud.

“As allegations come in, they will be investigated,” Thorne said in a separate interview.

Thorne said agents are looking at all levels of fraud in Louisiana, including public corruption.

Federal money has been pumped at an unprecedented rate into the gulf states since Hurricane Katrina struck on Aug. 29, and Louisiana and Mississippi are set to receive billions of dollars in aid.

“So if a person was predisposed … to commit an act of public corruption, this will be the time when he or she can dig their hand into the public trough,” Raucci said.

The Mississippi Katrina fraud task force, will be headquartered in Hattiesburg, about 70 miles north of the devastated coastal town of Gulfport, Raucci said.

There is low-level fraud occurring, including some people misrepresenting their identities to receive federal aid, and more sophisticated scams that could involve a group of people who must find ways to launder their ill-gotten profits, Raucci said.

Raucci said there will be indictments in the fraud cases, but could not say when or how many.

“You never know because you don’t know if just one public official is involved and he’s just basically acting on an opportunity or if this is something where there is an ongoing racketeering pattern or conspiracy,” he said. “I’d like to think that it’s just someone unfortunately became a little greedy but … often times there are others involved because you need others to help facilitate the fraud.”

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