$1.4 billion in bogus Katrina claims

Posted by: ST on June 14, 2006 at 10:17 am

This ought to get your blood boiling this morning:

WASHINGTON – Houston divorce lawyer Mark Lipkin says he can’t recall anyone paying for his services with a FEMA debit card, but congressional investigators say one of his clients did just that.

The $1,000 payment was just one example cited in an audit that concluded that up to $1.4 billion — perhaps as much as 16 percent of the billions of dollars in assistance expended after Hurricanes Katrina and Rita — was spent for bogus reasons.

The Federal Emergency Management Agency also was hoodwinked to pay for season football tickets, a tropical vacation and a sex change operation, the audit 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 get taxpayer help, according to evidence that gives a new black eye to the nation’s disaster relief agency.

“I do Katrina victims all the time,” Lipkin, the divorce attorney, told The Associated Press. “I didn’t know anybody did that with me. I don’t think it’s right, obviously.”

Government Accountability Office officials were testifying before a House committee Wednesday on their findings.

Rep. Michael McCaul, R-Texas, chairman of the subcommittee overseeing an investigation of post-hurricane aid, called the bogus spending “an assault on the American taxpayer.”

“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,” he said.

To dramatize the problem, investigators provided lawmakers with a copy of a $2,358 U.S. Treasury check for rental assistance that an undercover agent received 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.

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  • Toast, It's not just for breakfast anymore trackbacked with $1.4 billion in bogus Katrina claims
  • 5 Responses to “$1.4 billion in bogus Katrina claims”


    1. Bachbone says:

      No surprises here. A “surprise” would be any government-run program that wasn’t screwed up. When you hear some politician or bureaucrat say what something will cost or how long it will take to finish, multiply that by a factor of at least ten and you’ll have a truer estimate.

      A good start toward government “realism” would be to move the whole kit’n kaboodle to Michael Jackson’s Neverland Ranch. No, it wouldn’t improve its functioning and predictions, but taxpayers might at least begin to recognize where they are coming from.

    2. Jim M says:

      This is just one of many reasons that the Federal Government has no business being in the Charity Business. The media whipped up peoples emotions and came down on President Bush for not responding fast enough and now he will be blamed for the miss spent FEMA money. Katrina was the best thing that could have happened to these poor refugees free money great accommodations (Hotels and Cruse ships) all at taxpayer expense. Most of these so called evacuees were on the Government dole (Welfare, Section 8 housing and Food Stamps) before Katrina so what can you expect when we keep rewarding bad behavior? “Dah” more of the same! So no real surprise with what these bums, leaches, urban outdoorsmen spent the taxpayers money on, after all they didn’t have to earn it the money was free.

    3. Phil says:

      I don’t buy this at all — it smells like an attack on government assisstance that was set up to find fraud before it began.

      I think it’s impossible to give same-as-cash debit cards to people, and then try to see if they spent it on what you wanted them to spend it on. If you give someone completely liquid, fungible aid, who knows where it will ultimately end up? After all, if you trace money spent on gasoline, a bunch of it ends up with terrorists. Should we stop spending money on gas?

      I’m not impressed by anecdotal evidence that over a bilion dollars was miss-spent. As for the weird things people ended up paying for with the debt cards, who’s to say people didn’t trade their debt cards for food/shelter/cars/clothing, and then the debt cards ended up in the hands of the seller, who wasn’t a Katrina victim?

      From what I can tell, this is a great “shock” headline that will sell newspapers and news broadcasts for a couple of days, and keep the blathering talking heads busy chattering.

      That’s not to say there wasn’t fraud regarding katrina aid — but our economy thrives on fraud, and people who scam the system. I think what really grates on conservatives is that this was POOR people scamming the system.

      Compare even the most alarmist $1.4 billion figure with how much more Americans spent on oil in 2006 than in the same period in 2001: more than $200 billion more than the prior year. This money is going to line the pockets of rich friends of George Bush, thanks to the turmoil created by the war in Iraq, and the posturing against Iran. But of course these are RICH people scamming the system, so conservatives are OK with it.

      In fact, the news is absolutely full of stories of the rich capatalizing on government charity — see, e.g. the recent corruption convictions of Republicans. But no calls from conservatives to stop THAT kind of charity — that kind benefits them.

    4. – Not really all that surprising when you remember that during the immediate aftermath of Katrina, every Liberal polito-rag, and Left wing politician was screaming and squawking about; “FEMA’s too slow”, “Too much red tape”, “People are dying”; “Weres the beef”, which of course did exactly what they wanted, stampeded FEMA and the administration to just say the hell with it and start throwing money heavier than the floods themselves.

      – So now of course the yellow press gets a two-fer, now chiming in with “FEMA waste”, “Irresponsible government”….yada yada yada…..

      – Bang **==