Hurricane Katrina fraud costs FEMA $1 Billion

Wednesday, June 14, 2006

According to the results of an audit conducted by the Government Accountability Office (GAO), people displaced by Hurricane Katrina (and Hurricane Rita) used FEMA debit cards (pre-loaded with aid money) to buy diamond jewellery, Dominican Republic vacations, strippers, $300 worth of Girls Gone Wild videos, divorce lawyer services, and even a $200 bottle of champagne from Hooters.

FEMA hurricane card fraud did not stop there though, as one man recieved more than $139,000 in aid using 13 different IDs, all being sent to the same address.

Over 1000 prison inmates received FEMA debit cards by listing a post office box as their damaged property, and hundreds more people collected emergency housing assistance while living in free hotel rooms.

Several people applied for hurricane disaster assistance using Social Security numbers that either did not exist, or belonging to other people.

The GAO audit also found that FEMA 'lost track' of another at least 750 debit cards, worth a total of $1.5 million.

The GAO estimates as much as 16% of the FEMA Disaster Relief payments were made to people who submitted invalid registrations.

The results of the audit will be presented to an investigative panel of the House Homeland Security Committee on Wednesday. FEMA is part of the Department of Homeland Security.