FEMA fraud paid for football, vacations, erotica

updated 7:42 p.m. ET June 14, 2006

WASHINGTON - The government doled out as much as $1.4 billion in bogus assistance to victims of Hurricanes Katrina and Rita, getting hoodwinked to pay for football season tickets, a tropical vacation and even a divorce lawyer, congressional investigators have found.

Prison inmates, a supposed victim who used a New Orleans cemetery for a home address, and a person who spent 70 days at a Hawaiian hotel all were able to wrongly get taxpayer help, according to evidence that gives a new black eye to the nation’s disaster relief agency.

Federal investigators even informed Congress that one man apparently used FEMA assistance money for a sex change operation.

Agents from the Government Accountability Office, the investigative arm of Congress, went undercover to expose the ease of receiving disaster expense checks from the Federal Emergency Management Agency.

The GAO concluded that as much as 16 percent of the billions of dollars in FEMA help to individuals after the two hurricanes was unwarranted.

'Assault on the American taxpayer'
The findings are detailed in testimony, obtained by The Associated Press, that is to be delivered at a hearing Wednesday by the House Homeland Security subcommittee on investigations.

To dramatize the problem, GAO provided lawmakers with a copy of a $2,358 U.S. Treasury check for rental assistance that an undercover agent got using a bogus address. The money was paid even after FEMA learned from its inspector that the undercover applicant did not live at the address.

“This is an assault on the American taxpayer,” said Rep. Michael McCaul, R-Texas, chairman of the subcommittee that will conduct the hearing. “Prosecutors from the federal level down should be looking at prosecuting these crimes and putting the criminals who committed them in jail for a long time.”

FEMA spokesman Aaron Walker said Tuesday that the agency, already criticized for a poor response to Katrina, makes its highest priority during a disaster “to get help quickly to those in desperate need of our assistance.”

“Even as we put victims first, we take very seriously our responsibility to be outstanding stewards of taxpayer dollars, and we are careful to make sure that funds are distributed appropriately,” he said.

FEMA said it has identified more than 1,500 cases of potential fraud after Katrina and Rita and has referred those cases to the Homeland Security inspector general. The agency said it has identified $16.8 million in improperly awarded disaster relief money and has started efforts to collect the money.

The GAO said it was 95 percent confident that improper and potentially fraudulent payments were much higher — between $600 million and $1.4 billion.

Hotel lodgers paid twice
The investigative agency said it found people lodged in hotels often were paid twice, since FEMA gave them individual rental assistance and paid hotels directly. FEMA paid California hotels $8,000 to house one individual — the same person who received three rental assistance payments for both disasters.

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