FEMA Loses Nearly $500 Million in Katrina Aid to Fraud [View All]

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FEMA trying to recover hurricane aid

By FRANK BASS and EILEEN SULLIVAN
Associated Press Writers


WASHINGTON (AP) -- The Bush administration now acknowledges it is trying to recover nearly $500 million from people who improperly received federal aid money intended to help victims of two deadly hurricanes, Katrina and Rita, along the Gulf Coast two years ago. It said the amount may increase further.

"This is a moving target and not finite," said James McIntyre, a spokesman for the Federal Emergency Management Agency.

The government's newest estimate of improper aid represents $494 million FEMA paid to 134,000 people who were ineligible for the aid they received. More than half the money went to people who couldn't prove residency, according to FEMA figures. Overpayments and duplicate payments account for most of the remainder.

The amount had exceeded $500 million, but the agency wrote off nearly $27 million because of appeals or hardship waivers. The $500 million figure would represent nearly $1 of every $10 in government aid intended to help storm victims.

Congressional investigators determined people provided false addresses, other people's social security numbers and Gulf Coast addresses that did not exist. Because of the chaotic situation and loose controls, nearly half the 11,000 people who received emergency debit cards also received FEMA checks, investigators said.

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