Hurricane fraud suspects held

A federal task force has arrested 143 persons nationwide for bribery, extortion and fraudulent claims on hurricane disaster funding, and at least 1,000 investigations are ongoing in New Orleans.

“Unfortunately, we see it with every disaster, but we’re working very closely with the inspector general and Homeland Security and U.S. attorneys to prosecute every single case we come across,” said Nicol Andrews, Federal Emergency Management Agency spokeswoman.

Most of the cases involve false claims to aid earmarked for victims of hurricanes Katrina and Rita, but several extortion cases already are in the court system.

In St. Tammany Parish outside New Orleans, Councilman Joe Impastato was indicted last month on charges of extortion and money laundering.

Federal officials say Mr. Impastato pressured one debris removal contractor to hire a second contractor with whom he would share in half the profits. When the prime contractor declined, the official threatened to withhold parish payments for other work.

U.S. Attorney Jim Letten called the indictment “a clear and unambiguous signal of federal law enforcement’s commitment to seek out, punish and deter corrupt and self-serving conduct by public officials who use their positions to unjustly enrich themselves at the expense of the citizens they serve.”

In Georgia, three persons have been indicted by a grand jury for pretending to be Red Cross officials to solicit donations, and in a related gambling operation to sell tickets for a fake lottery to raise money for Katrina victims.

The Hurricane Katrina Fraud Task Force created by Attorney General Alberto R. Gonzales after the storms devastated the Gulf Coast is investigating and prosecuting disaster-related federal crimes such as identity theft, procurement, insurance and charity fraud.

A Justice Department spokesman said arrests in 117 separate cases spanned 22 different districts.

In addition, the Homeland Security Inspector General’s office is reviewing an estimated 350 contracts worth nearly $5 billion, and investigating more than 300 possible criminal cases, which so far have netted 51 arrests, 67 indictments and five convictions.

More than 7,000 calls have been logged on the inspector’s general hot line to report fraud.