Thousands of applicants for federal emergency relief money after hurricanes Katrina and Rita used duplicate or invalid social security numbers or bogus addresses, suggesting that the US$2.3 billion program was a victim of extensive fraud, a congressional auditor will report tomorrow.
The examination of the so-called Expedited Assistance program determined that the Federal Emergency Management Agency (FEMA) failed to take even the most basic steps to confirm the identifies of about 1.4 million people who sought expedited cash assistance, leaving the program vulnerable to the "significant fraud and abuse," the Government Accountability Office intends to report.
The auditors did not try to estimate the total dollar amount of fraudulent claims. But the report says that FEMA itself had found that 900,000 of the 2.5 million applications for all forms of individual assistance were "potential duplicates."
Even when FEMA's automated computer system picked out what might be fraudulent applications, payments were at times still sent, says the advance testimony of Gregory Kutz, the managing director of the GAO's forensic audits unit.
The controls were so lax that auditors were able to secure their own US$2,000 relief check by using "falsified identifies, bogus addresses and fabricated disaster stories," and then simply wait for the money to arrive in the mail, says the report written for the Senate Homeland Security and Governmental Affairs Committee.
Nicol Andrews, a FEMA spokeswoman, said the agency recognized there could be fraud. But Andrews said the priority was getting aid as fast as possible to hundreds of thousands of families in dire need.
"We took a calculated risk in a catastrophic situation," she said. "It was the right thing to do. Unfortunately, some may have cheated the system."
She added that some arrests had been made. The agency is also suspending payments to people suspected of trying to cheat the system.In one case, auditors found 17 individuals, some with the same last name and addresses, who used 34 bogus social security numbers to collect more than US$103,000.
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