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Task force flooded with Katrina fraud

From Terry Frieden
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WASHINGTON (CNN) -- More than 400 people -- including government and charity workers -- have been charged so far with illegally benefiting from Hurricane Katrina and the ensuing flooding, according to a Justice Department report released Wednesday.

However, the Katrina Fraud Task Force hasn't even begun to skim the waters, and the number could climb into the thousands, the report stated on the first anniversary of the task force.

"Disaster relief agencies have reported to law enforcement that they have identified thousands of questionable or possibly fraudulent payments to purported hurricane victims," the report said.

To date, the multi-agency command center in Baton Rouge, Louisiana, has received more than 6,800 complaints or tips for investigators to pursue.

The prosecutions of negligible fraud schemes has had a deterrent effect, as ineligible recipients of aid have voluntarily returned $18.2 million to the Federal Emergency Management Agency and the American Red Cross, the report says.

Most of the cases have involved people trying to obtain assistance from FEMA or the Red Cross, though cases of identity theft, procurement fraud and public corruption are emerging, the report states.

It adds that the task force found a "particularly distressing pattern of criminal activity" involving government and charity insiders. Among those being prosecuted are employees or contractors with FEMA, the Army Corps of Engineers, the Louisiana Department of Labor and the Red Cross.

The report came as Attorney General Alberto Gonzales met with about 170 police and prosecutors investigating and litigating fraud cases surrounding hurricanes Katrina, Rita and Wilma.

"We must ensure that the criminals who have exploited this time of human suffering are brought to justice and that their crimes do not undermine the programs intended to rebuild the homes, businesses and communities destroyed," Gonzales said.

Of the federal prosecutions thus far, 115 were in Louisiana, 79 in California, 50 in Texas, 48 in Mississippi and 31 in Florida.

Alberto Gonzales: Those who "exploited this time of human suffering" must be brought to justice.


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