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Bonanza for Katrina fraudsters
14/06/2006 22:19 - (SA)
Washington - Fraudsters splashed out on raunchy videos, $200 champagne and ritzy resort stays as part of a $1bn bill in swindled payments meant for US hurricane victims.
A house of representatives committee heard on Wednesday about a litany of bogus claims and misuses of emergency payments that were intended for victims of hurricanes Katrina and Rita last year.
In some eye-popping cases, prisoners who were jailed when the twin hurricanes barrelled into the southern US coast, billed the government for rental assistance.
And, several supposed hurricane victims enjoyed months-long vacations at holiday hot spots in Hawaii and the Caribbean, content in the knowledge that Uncle Sam would pick up the tab.
Gregory Kutz, managing director of special investigations at the general accounting office, which audits US government spending, said $1bn - or 16% of hurricane-assistance payments - were fraudulent.
"We believe our estimate understates the magnitude of the problem," he told shocked lawmakers.
Emergency debit cards
Kutz said one individual relaxed in Hawaii for three months - at a cost of $115 (about R785) a night - even though that person lived in North Carolina, hundreds of kilometres north of the area devastated by the two hurricanes.
Kutz also said some people abused special emergency debit cards given out to hurricane victims.
One person splurged on a $200 (about R1 400) bottle of Dom Perignon champagne at a Hooters restaurant, a chain famed for its scantily clad waitresses, he said.
Another scammer enjoyed a $300 (about R2 000) collection of Girls Gone Wild videos, which show risque shots of partying women, in various stages of undress and drunkenness.
Donna Dannels, acting deputy director of recovery at the much-lampooned federal emergency management agency (FEMA), said many steps had been taken to close loopholes for the 2006 hurricane season.
- AFP
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