Hurricane relief fraud may exceed $1 billion

? A federal probe has found that the government handed out as much as $1.4 billion in bogus aid to victims of Hurricanes Katrina and Rita.

The Federal Emergency Management Agency, which has been widely criticized for bungling the government’s response to the hurricanes, recieved another black eye with the report by the federal Government Accountability Office.

Some of the findings:

FEMA could not establish that 750 debit cards worth $1.5 million even went to Katrina victims, the auditors said.

Among the items purchased with the cards:

¢ an all-inclusive, one-week Caribbean vacation in the Punta Cana resort in the Dominican Republic.

¢ five season tickets to New Orleans Saints professional football games.

¢ a divorce lawyer’s services in Houston.

Evidence presented by the GAO also found that wrongful recipients included: prison inmates, a supposed victim who used a New Orleans cemetery for a home address, one man who apparently used FEMA assistance money for a sex change operation and a person who spent 70 days at a Hawaiian hotel.

GAO agents went undercover to expose the ease of receiving FEMA disaster expense checks.

The GAO concluded that as much as 16 percent of the billions of dollars in FEMA help to individuals after the two hurricanes was unwarranted.

The findings are detailed in testimony that is to be delivered at a hearing today by the House Homeland Security subcommittee on investigations.

FEMA spokesman Aaron Walker said Tuesday that the agency makes its highest priority during a disaster “to get help quickly to those in desperate need of our assistance.”

“Even as we put victims first, we take very seriously our responsibility to be outstanding stewards of taxpayer dollars, and we are careful to make sure that funds are distributed appropriately,” he said.

FEMA said it has identified more than 1,500 cases of potential fraud after Katrina and Rita and has referred those cases to the Homeland Security inspector general. The agency said it has identified $16.8 million in improperly awarded disaster relief money and has started efforts to collect the money.

The GAO said it was 95 percent confident that improper and potentially fraudulent payments were much higher – between $600 million and $1.4 billion.