Friday, January 27, 2006

The Katrina Frauds Keep Washing Up

The Glenn Frey song "Smugglers' Blues" talked about "the lure of easy money," and that certainly seems to be the case with those seeking to profit from the federal outlays in the wake of Hurricane Katrina.  In Oregon, the U.S. Attorney's Office announced (here) the indictment of six individuals for receipt of stolen government property for falsely filing with FEMA for $2,000 Katrina disaster assistance grants or $2,358 rental assistance grants:

Federal investigators have determined that checks were issued by FEMA payable to Portland residents named in these indictments based on false representations that the defendants were displaced by Hurricane Katrina. The indictments in these cases each allege that the defendant received a FEMA disaster assistance check knowing it was stolen. Each defendant is charged with one count of Receipt of Stolen Government Property.

In Conroe, Texas, Edward Good was arrested on state charges, and turned out to have seven unemployment relief debit cards, none in his name.  According to a press release (here) from the U.S. Attorney's Office for the Southern District of Texas, this is the first such scheme involving Disaster Unemployment Assistance (DUA):

DUA provides financial assistance to individuals whose employment or self-employment was lost or interrupted as a direct result of a major disaster declared by the President of the United States. On August 29, 2005, President Bush declared a major disaster for Louisiana as a result of Hurricane Katrina. The Louisiana Department of Labor administers the DUA program for the State of Louisiana. Funding for the DUA program comes directly from federal funds provided by the Federal Emergency Management Agency (FEMA). DUA benefits are available to individuals beginning after the date the major disaster began and for up to 26 weeks after the disaster declaration, as long as their unemployment continues to be a result of the major disaster. The maximum benefit amount is $98 per week for 26 weeks for a total possible benefit of $2,548.

The complaint alleges that Good lived in Marrero, Louisiana, until Hurricane Katrina struck and prompted his evacuation to the Conroe, Texas, area. Good first filed for DUA with the State of Louisiana in his own name and received a debit card within a few days. Thereafter, it is alleged that Good began a scheme that involved paying Conroe-area residents in cash or in drugs to obtain their identification information, which he then used to file for DUA benefits in their names listing a false prior place of employment in Louisiana. The Conroe-area residents were not Hurricane Katrina evacuees. Good would have the debit cards mailed to him and then personally use the cards bearing the names of these non-evacuees.

All that easy Katrina money has a mighty strong attraction.  (ph)

http://lawprofessors.typepad.com/whitecollarcrime_blog/2006/01/the_katrina_fra.html

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