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This page contains a single entry by Westley Annis published on February 6, 2007 11:03 PM.

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Katrina Fraud

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The Daily Comet ran an AP story about FEMA fraud after Hurricanes Katrina and Rita.

Some of the facts stated in the article:

  • In one neighborhood, the Federal Emergency Management Agency (FEMA) paid $84.5 million to 10,000 households which had fewer than 8,000 households existed at the time.

  • FEMA has found nearly 70,000 Louisiana households received $309.1 million illegally and more is expected.

  • FEMA gave out $5.3 billion in aid for Hurricane Katrina and Rita victims.

  • 400 have been prosecuted for fraud.

  • $18 million has been recovered.

  • Louisiana leads the number of cases with 115, followed by california (79), Texas (50), and Mississippi (46).

There are several things appalling in this story. First is the number of people who willfully defrauded the government. It's not bad enough that FEMA was woefully inadequate in assisting people, but the problems were compounded when they were faced with trying to ensure only those who legitimately needed the help received it while at the same time trying to keep it out of the hands of these thieves. All it did was slow down an already slow process.

The second appalling thing in this story is the slap on the hand some of those convicted of fraud are getting.

Take the story of Nakia Grimes. A resident of Atlanta, she falsely claimed a New Orleans address and received $2,000. Her penalty? Four months of home detention and a $100 fine. Besides the cost of prosecuting her, where is the other $1,900 she stole? Oh, don't worry, FEMA is demanding the State of Louisiana pay it back.

Here's one that is even worse, Lakietha Diann Hall, 35, of Dallas. Another person that has never resided in Louisiana. She bilked FEMA out of $65,000.

At least she will serve some real jail time, sentenced to 70 months. Her fine sounds stiffer, $83,254. Could FEMA actually be getting more back than what she stole?

Don't hold your breath.

Hall will be back that fine for the rest of her life at the rate of $100 a month. With this payback schedule, she will be 105 years old before she is finished. That's if she starts paying it back while she is serving her jail time.

According to the U.S. Census Bureau, Hall has a life expectancy of 69 years, which gives her 34 years to pay or 408 months. At $100 month, that's $40,800 which leaves a balance of $42,454. Look just at the amount she stole, and you still have a balance of $24,200.

That is more money than a lot of teachers make in one year that taxpayers are left holding the bill for. Again, not counting the cost of prosecution and incarceration.

The judges in these cases are being way too lenient. They need to put them on probation until they have repaid the theft and associated costs of prosecution. During that time, they must pay a minimum of 15% of their gross earnings or $100, whichever is higher, towards reimbursement. I'll be nice and let them deduct it from their income taxes. Any income tax refund checks go towards payback. Any week in which they are not gainfully employed, they must perform 20 hours of community service, none of which is deducted from the amount they owe. They are not eligible for any other type of government aid, whether it is food stamps, welfare, or Social Security.


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