Media outlets report that there are more than 1,300 open investigations of alleged FEMA fraud in the southern district alone. The U.S. Attorney’s office has said that the United States intends to investigate and prosecute aggressively.
Currently, 92 people are under federal indictment for fraud related to Hurricane Katrina. About half have already pleaded guilty and one has gone to trial.
One of those who pleaded guilty, Derek Shane Miller, used his FEMA his FEMA registration number to get nine different hotel rooms. He then rented those rooms to others and used the money for crack cocaine. His fraud totaled $27,811, and the government is asking for restitution as part of his sentence. He could also receive up to 20 years in prison.
The lone trial related to these Hurricane Katrina frauds was for Bryan Michael Beets in Mississippi He was found guilty and sentenced to two years in federal prison, three years of supervised release, and restitution of $3,854. He filed a claim with FEMA using an address in Long Beach that he said was his ex-wife’s. He was actually living and working in Vicksburg. He received from the federal government $260 and 12 nights in a hotel in Texas.
The most common cases being investigated by the U.S. Attorney’s office are fraudulent applications for FEMA aid. There was one program that gave about $2,000 to just about anyone who applied.
In total, the Government Accountability Office estimates that $1 billion was spent on fraudulent hurricane aid. FEMA has recovered less than 1% of that money.
Read my article about financial statement fraud and Hurricane Katrina.