WASHINGTON – Scammers hoping to finance tropical vacations or season tickets to football games with federal disaster funds may have second thoughts with House passage of legislation imposing sentences of up to 30 years for fraud related to disaster relief.
The legislation, approved by a voice vote Tuesday, was brought to the House floor a week after congressional investigators concluded that the Federal Emergency Management Agency was defrauded of up to $1.4 billion as it rushed to provide relief after last year's hurricanes Katrina and Rita.
Congress provided more than $68 billion in relief to the Gulf Coast after those two storms, said House Judiciary Committee Chairman James Sensenbrenner, R-Wis. "With such vast resources put into the pipeline so quickly, fraudsters and scam artists went into high gear in an effort to take advantage of these government programs."
The Government Accountability Office study that came out last week cited such examples as FEMA paying an individual $2,358 in rental assistance at the same time it was paying about $8,000 for the same person to stay 70 nights in a Hawaii hotel.
It said FEMA ended up paying for season pro football tickets, a one-week Caribbean vacation and a sex change procedure.
The legislation, which now goes to the Senate, imposes a fine of up to $1 million and prison terms of up to 30 years for wire, radio, television or mail fraud in connection with a presidentially declared major disaster or emergency. While current statutes on mail and wire fraud carry similar penalties, the maximum prison term for making false statement to the government is five years.
Sensenbrenner noted that since the formation of the Hurricane Katrina Fraud Task Force, established by the attorney general last September, 261 people have been charged in 218 cases, with 44 guilty pleas or convictions.
"Despite these efforts, it is clear that current criminal penalties are insufficient to deter disaster fraud," he said.
Among those sentenced so far are a Galveston man given a year in prison for bilking FEMA of $2,000 by falsely claiming he had a home damaged in Louisiana and a Florida man given a 21-month sentence for falsely claiming he was flying relief missions to Louisiana and soliciting charitable donations.
Courts in Florida have also been trying cases related to an estimated $31 million in possible fraud arising from Hurricane Frances in 2004. Last year two Miami women pleaded guilty to fraud charges for collecting disaster aid for a storm that hit 100 miles to the north of them. One woman, who received nearly $25,000 for a sewer backup that occurred weeks before the hurricane, was given two months' house arrest, three years' probation and ordered to repay the government for the claim.