U.S. seeks return of hurricane aid

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NEW ORLEANS (AP) -- The U.S. government gave $84.5 million to more than 10,000 households in a neighborhood President Bush visited right after Hurricane Katrina. But U.S. Census figures show fewer than 8,000 homes existed there at the time.

Now the government wants back a lot of its money.

The Federal Emergency Management Agency (FEMA) has determined nearly 70,000 Louisiana households improperly received $309.1 million in grants, and officials acknowledge those numbers are likely to grow.

In the chaotic period after two deadly hurricanes, Katrina and Rita, slammed the Gulf Coast in 2005 -- Katrina making landfall in late August, followed by Rita in late September -- federal officials scrambled to provide help in hard-hit areas such as submerged neighborhoods near the French Quarter.

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.

The Justice Department thus far has prosecuted more than 400 people for storm-related fraud, and $18 million has been returned to FEMA or the American Red Cross, according to a recent report by the department's Katrina Fraud Task Force. The bulk of prosecutions have occurred in Louisiana (115), California (79), Texas (50) and Mississippi (46). The amount recovered so far, however, is slight compared with estimates of widespread fraud.

Among those already prosecuted: Lakietha Diann Hall, 35, of Dallas. Prosecutors said Hall and 10 others -- including her mother -- filed fraudulent assistance applications over the Internet claiming damage to her home in New Orleans. Hall, whom authorities said never lived in Louisiana, received $65,000 in disaster aid, court records show.

The New Orleans apartment complex where Hall claimed she lived was in a neighborhood of 18,100 homes before the storm; FEMA records show the government gave money to more than 21,000 homes there after Katrina.

Hall pleaded guilty to identity theft. She was sentenced in November to 70 months in prison and ordered to pay $100 each month until she repays the U.S. government $83,254 -- a court-imposed payment plan that will take nearly 70 years.

The AP analysis discovered the government made more home grants than the number of homes in one of every five neighborhoods in the wake of Katrina.