More personnel sought for post-Katrina fraud investigations
Multidepartmental effort nets tips, initiates probes and leads to convictions, investigators testify.
Federal investigators from several departments, along with state and local officials on the Gulf Coast, will spend years combing through thousands of tips for possible contracting fraud in the aftermath of Hurricane Katrina, witnesses told a House panel Wednesday.
Already, more than 260 people - including some government employees - have been charged with a range of crimes because of investigations by the Homeland Security and Justice departments, the FBI and the Secret Service, among others. However, additional personnel, including investigators and prosecutors, will be needed, officials testified at a House Government Reform Subcommittee on Government Management, Finance and Accountability hearing.
"We have asked for additional resources," said Alice Fisher, chair of Justice's Hurricane Katrina Fraud Task Force.
The task force is headquartered in Baton Rouge, La., and because all departments and agencies - from federal to local levels - share databases, once allegations lead to charges, each investigator is notified to see if additional inquiries are being conducted elsewhere, Fisher said. Because some contracts will continue for years, the task force's effort will continue indeterminably, as will the need for continued support and personnel.
Local and federal employees have been caught either taking or soliciting bribes, Fisher said. A pair of Federal Emergency Management Agency managers in Algiers, La., each took $10,000 in bribes and, after being caught, pleaded guilty in April for defrauding a meal plan. A U.S. Army Corps of Engineers employee also was caught taking bribes, she said.
DHS Special Inspector Matt Jadacki said hundreds of cases remain open and he anticipates a three- to five-year commitment in the Gulf Coast.
"We plan to continue, we know this is a long-term, ongoing effort," he said.
Fisher described other schemes that took place far beyond the wake left by Hurricane Katrina. Some people filed multiple applications for aid, and others made up identities. Some filed from far-flung places that went unaffected - even prison. And others impersonated charities, or just made up fake ones.
Fisher said some scammers have taken notice of investigative efforts. More than $8 million has been voluntarily returned to various government entities, but it cannot be estimated how much of that was out of fear of getting caught, she said. However, she added, some of the checks that were returned already were under investigation.
Last week the House Government Reform Committee criticized the Army Corps of Engineers and DHS officials for widespread mismanagement that created the opportunity for contracting fraud.