FEMA on the Lookout for Fraud in Alabama Following Katrina

March 2, 2006

With close to $590 million in disaster assistance disbursed to Alabama hurricane victims, the U.S. Department of Homeland Security’s Federal Emergency Management Agency (FEMA) is working to ensure that disaster relief funds go only to those legally entitled to receive it.

Both state and federal officials are actively doing everything possible to avoid fraud. FEMA supports a zero tolerance policy with respect to fraudulent cases.

The DHS’s Office of the Inspector General (OIG) and the U.S. Department of Justice along with other federal agencies, investigate cases of fraud, waste, and abuse of federal disaster funds.

“Fraud is an unfortunate side effect of disaster relief, but through a cooperative effort by federal agencies, we can reduce the possibility of it happening. We want to make sure the money is used in a way that will help those who need it most” said Federal Coordinating Officer Michael Bolch. “Cases of fraud will be investigated for as long as we are assisting victims in the recovery process.”

People have been charged with criminal violations related to FEMA relief funds in the immediate aftermath of Hurricane Katrina. Some complaints already called in include allegations that applicants are using false names or fictitious addresses; claiming non-existent losses or losses to someone else’s property; misusing FEMA grants; receiving duplicate payments from FEMA and insurance companies; and stealing FEMA checks. Convictions can lead to a maximum of five years imprisonment and fines up to $250,000 per count.

There are several ways for government officials to detect fraud. One is through an electronic process that cross-checks information from FEMA, its partner agencies, and insurance companies to detect duplicate or fraudulent applications. Additionally, homes of applicants are inspected to verify damages and losses claimed. Suspected cases of fraud are referred to the U.S. Department of Justice for investigation and possible prosecution.

“Disaster assistance should go to the real hurricane victims, not people who try to cheat the system,” said Bruce Baughman, state coordinating officer of the Alabama Emergency Management Agency.

Any applicant who has made a mistake in reporting damages or misrepresented losses will be given an opportunity to correct or cancel the claim. Anyone who makes an error when submitting a claim can contact the FEMA Helpline at 800-621-FEMA (3362) or (TTY) 800-462-7585 for speech- or hearing-impaired to correct that error.

Alabamians who suspect fraudulent activity can report it – anonymously if they wish – on the Hurricane Relief Fraud Hotline at 866-720-5721. Fraud can also be reported to the Federal Trade Commission at 877-382-4357 or (TTY) 202-326-2502 for speech- or hearing-impaired. The last number is not toll-free.

Reports of fraud can also be mailed to the Office of the Inspector General, Federal Emergency Management Agency, 500 C St. SW, Washington, D.C. 20472.

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