Hurricane Katrina. Hurricane Sandy. Droughts and Heat Waves. Fires. Earthquakes. Tornadoes. The federal government spends roughly $45 billion a year on disaster relief — to help people and businesses that have suffered sudden and horrible harm and loss from natural disasters.
In the wake of these tragedies, time is usually of the essence, and red tape is eliminated so that funding can start flowing right away to victims who need food, clothing, shelter, and medicine fast. The flip side, however, is that safeguards against fraud are inevitably relaxed.
After Hurricane Katrina, there were breathtaking accounts of scams, schemes and lies, such as hotel owners charged with submitting enormous bills for lodging for phantom victims, renovations for a shelter at a former Army base that were billed at a cost of about $416,000 per evacuee, victims filing false claims for federal benefits, and profiteers who treated evacuation and recovery efforts as a cash cow, fraudulently submitting claims for goods or services never provided. Disasters bring out both the best and the worst in people and, as a result, relief efforts unfortunately provide opportunities for a variety of frauds against FEMA and other government agencies, including:
- Fraudulent bills, for services or goods never provided
- Claims seeking benefits for phantom victims
- Fraudulent claims of damage or injury
- Fraudulent claims for federal flood insurance
A number of successful False Claims Act cases have been brought relating to fraud involving disaster relief funds. By way of example:
In 2009, Lighthouse Disaster Relief agreed to pay $4 million to resolve claims that the company had made false statements to FEMA employees to secure payments and had knowingly breached a contract to build and operate a base camp to house and feed first responders in New Orleans after Hurricane Katrina.
If you have knowledge and solid evidence of fraud or false claims involving federal disaster relief funds, please contact our whistleblower attorneys. Consultations are free and confidential.