1/3rd of Katrina government payouts fraud


The GAO report found that up to 900,000 of the 2.5 million applicants who received aid under the emergency cash assistance program — which included the debit cards — based their requests on duplicate or invalid Social Security numbers, or false addresses and names.

n other instances, recipients improperly used their debit cards intended for food and shelter for $400 massages, a $450 tattoo, a $1,100 diamond engagement ring and $150 worth of products at “Condoms to Go.”

“It was a mess. It was a system that was wide open to fraud,” said Gregory Kutz, who led the investigation for the GAO. “All you had to do was call FEMA on the telephone and lie and you could get money. It was just a question of how many people were willing to make false statements.”

FEMA representatives defended their procedures, saying the urgency of the situation did not allow for strict identity verification and that they were focused on getting aid to desperate families as quickly as possible.

For chrissakes, I can see a little, but a third?

I laughed when I heard this the other day. Land of opportunity!

Without knowing their exact system, I think this is a no-win situation. If they add increased scrutiny and background checks, then they’re holding up the system and keeping aid from victims who really, really need it. If they’re more lax, this happens.

At least the defrauded money is going back into the local economy? No? Worth a shot. Ultimately I think it’s just part of the cost of disaster recovery.

I have like 400 of these, what? you guys didnt grab some?

(I kid!)

Exactly, thats the sucky part. Somebody who’s just lost their house and all their possessions probably doesn’t have easy access to all of the required identification papers in order to prove who they are and where they (used to) live. I’m betting lots of people don’t memorise their SS number, and probably don’t keep the card in their wallet. They had to be lax because of the nature of the emergency. Hopefully they can just follow up on the obviously fraudulent claims and prosecute.

Yeah, let’s spend a big hunk of gvt resources trying to put broke freeloaders in jail where they can be fed and housed at gvt expense.

I find that very hard to believe. Who doesn’t know their SS? It’s your central ID number.

People who live hand to mouth in a cash economy.

Hey who said anything about jail? Just fine them the money they fraudulently claimed. of course you will probably never get it back…

I guess now we can start to understand how billions of dollars in foreign aid can end up as piss in the wind.
The lesson to people in the affected area is to look forward, hunker down, and;

  1. Form a number of dummy corporations. Make sure to get a lot of fake letterhead, fake mailing addresses in different states, and whatnot.
  2. Borrow or invent a large number of identities. Name one of them “Scott Johannes.”
  3. Have Several dummy corporations charge another for millions of dollars of toiletries, food, clothing and vehicles. (Suppliers charge distributor/emergency services corporation.) Name “Scott Johannes” CEO of your central dummy corp.
  4. Each supplier should order the items that their charges to the central dummy document from real suppliers.
  5. Dispose of the items from legitimate suppliers on the black market but keep the paperwork showing that you recieved the goods.
  6. Get receipts from Scott Johannes Corp.
  7. Procure emergency funding cards.
  8. Have the dummy corporation that is in debt charge the cards for the food, toiletries, clothing, and other essentials.
  9. Send a letter from each dummy supplier/distributor to “Scott Johannes” and his company demanding payment.
  10. Don’t pay the legitimate suppliers, let them sue your fake corporations into bankruptcy.
  11. Use your bankrupted fake companies as a write off on your taxes.
  12. “Go” to the “Caribbean” to “track down” “Scott Johannes.”

I know that it would be easy for people in the Katrina stricken zone to just give up and not order legitimate merchandise and dispose of it on the black market, and that it really eats into profits, but they have to remember that fake paperwork and charges are what lead America to prosperity, and they will lead us back.

Can’t say I’m surprised, but they didn’t have any choice if they wanted to get the money out quickly and painlessly.

I remember when they caught that woman from Tennessee early on in the distribution process. I figured she wasn’t the only person to come up with the idea to try and make a quick $2000.

There were people who also got 9/11 money by fraudulent means, and this one was even more difficult to police for the reasons stated above.

Better use of the money would probably be to roll in Government funded construction and salvaging crews. Free house repairs, etc. And while they are at it, roll in a bunch of government funded food stations, or whatever. Like meals on wheels, except not just for the homeless.

There are times when it’s good to give money to people directly, and then there are times when the government needs to take a more hands on approach. Basically, instead of giving out aid money, they just should have said “Have the construction crews bill this address”.

Except then you have construction companies billing for work on buildings that never existed…

“How did you get money for this pool, Bob?”