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.
"There's definitely a backlog," says Dugas, whose office helps coordinate an anti-fraud task force formed after the hurricanes. "Right now, that means we might not get to some cases as quickly as some people might like. If there's still a backlog in two years when we start running up against the statute of limitations, that's different."
Hurricanes Katrina and Rita triggered more than $7 billion in disaster aid to Gulf Coast households, plus billions more in government contracts and rebuilding projects. Allegations of fraud have accompanied that assistance, and prosecutors have vowed zero tolerance for people who tried to cheat the government.
About 700 people have been charged.
Most of the cases involve alleged lies to the Federal Emergency Management Agency to cash in on $2,000 payments it sent out shortly after the storms struck. In one, prosecutors charged that two roommates in Houston sent FEMA 39 claims for assistance for the two storms and lied about living in places hit by the hurricanes.
The Hurricane Katrina Fraud Task Force has referred 11,000 potential fraud cases to Homeland Security and a handful of other law enforcement agencies. Each of those was screened first to make sure there was some possibility of fraud.
Separately, the Government Accountability Office, Congress' investigative arm, identified another 22,000 cases, though Dugas says many proved to be bookkeeping errors. The government's latest complete tally of its investigations, in September, listed more than 1,700 open criminal cases.
It's difficult to compare those reports to other disasters, though fraud was clearly more widespread after the Gulf Coast storms, says Donna Dannels, who runs FEMA's Individual Assistance program.
When the storms hit, FEMA ignored some of its financial safeguards to get aid to victims more quickly. As a result, the GAO estimates FEMA spent $1 billion on improper disaster aid; auditors are separately reviewing storm contracts.
House Homeland Security Committee Chairman Bennie Thompson, D-Miss., says authorities should focus on those big cases first: "When the appearance is that all of your investigative might is being spent pursuing people who might have received duplicate vouchers, that's not the highest and best use of the resources of the federal government."
Top priority usually does go to cases with the biggest dollar losses, says Marta Metelko, a spokeswoman for the Homeland Security Department's Inspector General. It could be years before the agency's investigators can review all fraud claims, she says.
The cases include allegations of fake Social Security numbers or addresses. But authorities also have sought charges in more complex schemes. In one, the police chief in Independence, La., pleaded guilty to overbilling the government for overtime.
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.
