In The News
Katrina fraud cases flood courts,
The New Orleans Times-Picayune
"Jeffrey Schaler, a psychologist and professor in the Department of Justice, Law and Society at American University, said it's not just major disasters that elicit fraudulent claims. Any time there's a major bus accident, he said, people come forward to falsely claim that they were passengers and suffered debilitating injuries. Many share a common personality trait, according to Schaler. 'They have a sense of entitlement or what would be referred to in psychiatry as narcissism,' he said. 'They think somehow they are owed what other people have to work for.' "
WASHINGTON -- In her application for federal emergency help, Tina Marie Gilmore told officials how she watched hopelessly as her two daughters, ages 5 and 6, were swept through the rushing floodwaters after Hurricane Katrina and was so distraught several months later that she couldn't function -- couldn't drive a car or even be in the same room with children.
But after mailing her a check for $4,358, the Federal Emergency Management Agency learned that not only did the 34-year-old woman not live in New Orleans when Hurricane Katrina devastated the city, but she also didn't have any children. Even her last name was a fake. The government said it wasn't Gilmore, but Winston.
Last month, U.S. District Judge William Stiehl sentenced the Belleville, Ill., woman to four years in jail. "She took advantage of the taxpayers of this country under very tragic circumstances," Stiehl said.
Winston is one of about 600 people in 19 states and the District of Columbia who have been indicted for making fraudulent hurricane claims. Louisiana has the most cases, 140, followed by Mississippi, with 105, and California, 71.
One of the most prevalent schemes, according to the government, involved false claims for emergency $2,000 allocations from FEMA, money intended to pay emergency living expenses after Katrina forced hundreds of thousands of people from their homes.
But some of the scams were far more audacious.
According to the Justice Department, Lawanda Williams of Jackson, Ala., filed 28 separate claims for hurricane damage, listing addresses in Louisiana, Alabama, Mississippi and Florida and various Social Security numbers, addresses, phone numbers and post office box numbers. She had collected $267,377.15 before a FEMA staffer in Biloxi, Miss., noticed discrepancies in the applications and saw one common thread: All seemed connected to Williams.
On Feb. 1, Magistrate Bert Milling Jr. sentenced Williams to 75 months in prison and ordered her to reimburse FEMA for every penny she received, money the Justice Department says was used to buy a double-wide mobile home, a 50-inch television set and several used cars.
Other Katrina-related fraud charges include officials with FEMA and the Army Corps of Engineers demanding bribes for Katrina contracts or assistance; the sponsor of a Florida charity promising to fly in supplies to hurricane-devastated communities but doing no such thing; and 72 people, including 22 Red Cross employees, who the government says conspired to collect fraudulent payments through an emergency call center in Bakersfield, Calif. Most of the 72 have pleaded guilty to fraud charges.
"I'm never sure what really motivates the criminal," said Alice Fisher, head of the Justice Department's criminal division and coordinator of the Katrina Fraud Task Force that has coordinated the investigations for about 35 federal agencies. "But it's sad that in such a terrible disaster we'd have so many people steal money that is supposed to help people rebuild their homes and rebuild their lives."
'Sense of entitlement'
U.S. Attorney Jim Letten said he isn't surprised that the Eastern District of Louisiana, which covers metropolitan New Orleans, is on the low end of fraud cases given that the devastation of the storm meant most of the area's residents suffered at least some damage during Katrina.
According to the Justice Department, the Eastern District had 18 cases, although Letten believes the actual number is in the 30s. Still, that's fewer cases than reported for the Eastern District of California, the Northern District of Alabama and middle district of Louisiana, which includes Baton Rouge.
Katrina isn't the first time that people have tried to take advantage of a disaster and the programs intended to help the victims. After the Sept. 11, 2001, terrorist attacks, people were prosecuted for seeking government or charitable money by falsely claiming that they lost a close family member at the World Trade Center or the Pentagon.
Jeffrey Schaler, a psychologist and professor in the Department of Justice, Law and Society at American University, said it's not just major disasters that elicit fraudulent claims. Any time there's a major bus accident, he said, people come forward to falsely claim that they were passengers and suffered debilitating injuries.
Many share a common personality trait, according to Schaler.
"They have a sense of entitlement or what would be referred to in psychiatry as narcissism," he said. "They think somehow they are owed what other people have to work for."
Tracing the claims
And a disaster as big as Katrina might have seemed the perfect opportunity to make a fraudulent claim under the theory that the government had so many legitimate applications for help that it would be impossible to separate the good from the bad. That could help explain much of the $1.4 billion in fraudulent claims estimated by the Government Accountability Office. So far, the government has collected $18 million in restitution for false claims, some from people who settled to avoid prosecution.
Fisher said investigators have accepted a large number of guilty pleas, an indication that the fraud allegations are relatively easy to prove. "We have the person cashing the (government) check, and it's not that difficult to establish that a person didn't really live where he or she said they did," Fisher said.
Sometimes, those filing false applications provide obvious clues. For example, Winston, the Illinois woman who claimed to have seen her two children drown, raised eyebrows because she listed different ages for her daughters in her written documents.
Also assisting the investigations, according to Fisher, was the willingness of federal law enforcement agencies to work together and share documents, something that didn't happen before the 2001 terrorist attacks, according to the 9/11 Commission.
In many instances, applicants used information they gleaned from watching real-life tragedies on TV in the extensive coverage that followed Hurricane Katrina's assault on the Gulf Coast on Aug. 29, 2005.
Storm schemes
Here are some of the schemes outlined by federal investigators:
-- In Florida, Gary S. Kraser set up the Web site www.AirKatrina.com, which in one day took in $40,000 in donations to pay for relief flights to hurricane-damaged communities. Kaiser said he would bring in medical supplies and airlift children and others in need of medical help, but did no such thing, according to the indictment. He was sentenced to 21 months in jail. The day after Hurricane Katrina struck, Kraser wrote on his Web site: "I am shaking as I write this as I just arrived home and just now allowed my body and mind to accept what I saw tonight. I saw people on their roofs that had used axes more than likely to cut through the roof, waving at us, as we were Air Rescue." According to the government, Kraser wasn't a pilot and didn't have an airplane.
-- In Washington, D.C., Jeffrey Alan Rothschild was sentenced to 102 months in prison after pleading guilty to collecting $100,000 from FEMA by submitting false claims on behalf of people he claimed were Katrina victims and cashing the checks himself. According to the government, Rothschild told investigators he would use New Orleans addresses on his applications that he either found on the Internet or made up. By the time the government caught up with him, he had collected 38 checks.
-- In Bakersfield, Calif., 72 people helped friends, relatives and others obtain Katrina emergency money for which they weren't entitled, according to a federal indictment. Among those indicted were Aminah Randle, Robert Johnson, Elizabeth Ray and Sheena Porter, who worked in a Red Cross call center.
-- In Missouri, Andrea Gholston admitted she had filed an application listing a fake New Orleans address and received $4,358 from FEMA, and then helped a friend fill out another fraudulent application, which netted more than $10,000.
-- In New Orleans, two FEMA employees, Andrew Rose and Loyd Holliman, both Colorado residents, solicited a bribe from a food contractor in exchange for inflating the number of people requiring meals at the Algiers base camp so the company could collect more federal fees. On Jan. 27, the two employees each took an envelope with $10,000 in cash, according to the Justice Department. They both got 21 months in prison and were fined $20,000.
-- In Mississippi, four people -- Devin Chuter, Allen Kitto, Clinton Miller and Lauren Robertson -- were accused of submitting false claims for debris-removal work.
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Bruce Alpert can be reached at bruce.alpert@newhouse.com or (202) 383-7861.
Louisiana leads in number of cases
Saturday, March 03, 2007
By Bruce Alpert
Washington bureau
