Hurricane Scams: Consumers aren’t the only victims

It is just coming to light that FEMA was scammed by faux-Hurricane Katrina & Rita victims. It seems that when it comes to hurricanes, consumers aren’t the only ones vulnerable to scams.  Seems that last year’s hurricanes had looters of a different form.

According to stories found here, here or here – In an audit by the Government Accountability Office (GAO) up to 1.4 billion (yes that’s right - BILLION) relief dollars, or possibly up to 16% of the total aid, were used to fund ventures such as:

• A Caribbean holiday
• Season tickets to see the Saints
• Porn & Liquor
• Bogus rental assistance
• A divorce
• And my personal favorite – A sex change

FEMA is getting heat for this latest debacle for apparently “failing to respond” to the fraud allegations. In one case, FEMA gave rental assistance to an undercover agent that was using a bogus address even after FEMA learned that the undercover applicant did not live at the address given on the relief application. In another example, someone used 13 different Social Security numbers and received $139,000 in payments, all sent to a single address.

“We went out and gave people $2,000, and obviously a lot of those people did not live in Louisiana, did not live in the devastated areas, weren’t who they said they were,” FEMA Director, R. David Paulison told reporters in Washington.

While FEMA is trying to downplay the scandal insisting that they have found $16.8 million in bogus relief purchases, the GAO is highly confident that the numbers are between $600 million and $1.4 billion.

Did you donate to hurricane relief last year? I know that we did. What a waste of our money! In a quote by Stephen Gordon over at Hammer of Truth,

“The fault in this case is more than obvious. If you pass out a stack of debit cards to a large group of people, only a moron would expect all of them to spend all the money on items like Pampers, bottled water and staple food supplies.”

And

“Both sides seem to be missing the obvious question: Since when is it the responsibility of the Federal government to pass out debit cards to the victims of any natural (or government caused) disaster?”

There is now a new ID verification system in place and in the future, hurricane victims can only withdraw $500 for a strict list of items including food, shelter, clothes and transportation.

There are two scammers here:

• The people who purposefully took aid money that is still desperately needed -AND-
• FEMA for thinking that they can rely on the “honesty of good people”, for having no control over who received the money or how it was spent.