There is no doubt about it – the Katrina and Rita debacle – was NOT a shining moment in our nation’s history. Fifteen months later as New Orleans prepares to celebrate “Fat Tuesday” (Mardi Gras), more allegations of fraud and mismanagement are coming to light.

Two reporters (Michelle Roberts and Frank Bass) of the AP wrote an interesting article about how FEMA now wants $300 million back in claims paid for households that didn’t exist, according to official pre-hurricane census figures.

Even more interesting is that they did their own analysis using the federal Freedom of Information Act, which deducts that a lot more than $300 million in might come out in the wash before all is said and done.

Here is what they said in their article:

But an Associated Press analysis of government data obtained under the federal Freedom of Information Act suggests the government might not have been careful enough with its checkbook as it gave out nearly $5.3 billion in aid to storm victims. The analysis found the government regularly gave money to more homes in some neighborhoods than the number of homes that actually existed.

The pattern was repeated in nearly 100 neighborhoods damaged by the hurricanes. At least 162,750 homes that didn’t exist before the storms may have received a total of more than $1 billion in improper or illegal payments, the AP found.

Full story (ABC news version), here.

While there is no doubt a big problem exists, we need to put the overall issues in perspective and I’m not sure FEMA is entirely to blame.

David Garratt, FEMA’s deputy director is saying that officials were in a “no win” situation. And while, I’m not here to defend FEMA, he probably has a valid point.

When the federal government got involved, fraud artists from all over the world were setting their sights on what they saw as a “lucrative opportunity.”

A lot of the fraud that occurred didn’t necessarily come from the areas affected by the hurricane.

Couple this, with a lot of pressure to right all the initial blunders in the disaster, which most of us were watching “live,” and mistakes were made.

Sadly enough, fraud prevention systems in place, were deemed to cumbersome and disabled. Again, there was a lot of pressure (rightfully so) to take swift action to help a lot of people, who were in harm’s way.

We can blame FEMA all we want, but the fact is that fraud is growing at a rapid rate, and the federal government isn’t the only one with inadequate fraud prevention systems.

For example, in Southern California (pretty far from Louisiana), there was another interesting article about the taxpayers footing a $1.5 billion a year bill for fraud, here.

And while there seems to be a lot of government fraud, fraud in the private sector is growing by leaps and bounds, also. There is no doubt that identity theft (another growing problem) helped fuel the fraud in the hurricane disasters.

There is a lot of evidence to suggest that much of this fraud is enabled by information that has been data-mined on all of us, which isn’t protected very well. Some suggest that technology and the information sector, which make a lot of money selling their wares are the root cause of all of this.

Unfortunately, those committing fraud are too keenly aware of this.

Blaming FEMA is unlikely to correct the overall problem. And if their fraud prevention systems were inadequate, perhaps we should be looking at who sold them the faulty systems?

Perhaps, when history is written, the Katrina disaster is a warning of the looming disaster we all face if we don’t stop viewing fraud as a “victimless crime.”

Fifteen months later (as Mari Gras approaches), there are still a lot of people suffering from the hurricane disasters.

If you would like to learn more about this, Margaret Saizan’s site (Beyond Katrina) is a great resource.

I wonder how much good the money would have done for the true victims if it hadn’t been stolen from underneath them?

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