Government Reform

Hurricane Katrina: A Full Employment Act for Federal Fraud-Busters


More than 18 months after Hurricane Katrina decimated the Gulf Coast, authorities are chipping away at a mountain of fraud cases that, by some estimates, involve thousands of people who bilked the federal government and charities out of hundreds of millions of dollars intended to aid storm victims.

The full scope of Katrina fraud may never be known, but this much is clear: It stretches far beyond the Gulf Coast, like the hurricane evacuees themselves. So far, more than 600 people have been charged in federal cases in 22 states—from Florida to Oregon—and the District of Columbia.

The frauds range in value from a few thousand dollars to more than $700,000. Complaints are still pouring in and several thousand possible cases are in the pipeline—enough work to keep authorities busy for five to eight years, maybe more.

The AP reports that 150 to 250 new cases continue to be referred to investigators a week and that some 9,600 cases are being investigated. More here.

In a special section in our December 2005 issue, Reason looked at Katrina and the failure of public policy. And in our December 2006 issue, Neille Ilel looked at how unconventional groups plugged the gap left by traditional aid groups in New Orleans. Read all about it here.

NEXT: Big Old Jet Airliner...From Hell

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. It got that way not with conventional charity or insurance, nor with government aid, but with a ragtag crew of amateurs.

    “Conventional charity” = “ragtag crew of amateurs,” and, since all (can you find one that doesn’t?) big charities now get most of their money from government programs, and have to follow big-gov’t rules, “conventional charity” = “big government.” Charities are gov’t contractors.

    My GF deals with a few hundred bucks of FEMA money every year (because drunks who spend their money on booze rather than food are a ‘federal emergency’; see ‘TEFAC’) and she and they have recently spent thousands of dollars in time accounting for a few hundred dollars of FEMA money; money that’s been wasted, er, spent, in the same way and in about the same amount that it has been for years.

  2. The frauds range in value from a few thousand dollars to more than $700,000.

    That’s quite a few freezer’s worth.

  3. It would be interesting to know what it costs to “recover” a dollar of those fraudulently obtained handouts.

  4. Who’s going to investigate the amount of fraud occurring by the fraud investigators?

  5. Years of case backup? There must be some kind of shortage of investigators. If only there were some agents currently investigating crimes without victims that we could redeploy.

  6. It would be interesting to know the percent of fraud dollars in relation to total dollars dispensed.

Please to post comments

Comments are closed.