Department of Justice 2011 Report on Disaster Claims Fraud

The Department of Justice recently released the Fiscal Year 2011 Report of the Disaster Fraud Task Force. The task force, originally created as the Hurricane Katrina Fraud Task Force in September 2005, operates to deter, detect and prosecute individuals who attempt to take advantage of natural and man-made disasters by committing frauds and related crimes, including the 2010 Deepwater Horizon oil spill (BP oil spill).

Since 2005, millions of people have needed help from government and private-sector entities in various disasters. For example, in the first month after Katrina struck, the Federal Emergency Management Agency (FEMA) received more than 2.5 million applications for disaster assistance relating to Hurricanes Katrina and Rita. In addition, hundreds of thousands of people throughout the Gulf Coast region were displaced; hundreds of thousands of homes and other housing units were destroyed or damaged; and residents suffered tens of billions of dollars in losses because of storm damage. Most recently, the Deepwater Horizon oil spill has caused vast economic harm to people along the Gulf Coast and beyond.

United States Attorney’s Offices across the country continue to show great persistence and dedication in pursuing disaster-related fraud. Through the end of Fiscal Year 2011, 47 United States Attorney Offices across the country charged 1,439 people in 1,350 cases with various fraud-related crimes stemming just from Hurricanes Katrina and Rita. As the Report shows, many of these defendants received sentences imposing significant terms of imprisonment. In addition, in the aftermath of the Deepwater Horizon oil spill in April 2010, during Fiscal Year 2011, nine United States Attorneys Offices charged 43 defendants with various fraud-related offenses stemming from the oil spill and applications for compensation.

These prosecutions also involved a wide variety of fraudulent activity, including charity scams, government and private-sector benefit fraud, identity theft, contract and procurement fraud, and public corruption.

A key component to the success of the task force is its National Center for Disaster Fraud (NCDF), based in Baton Rouge, La. “The NCDF provides the public with a single nationwide point of contact to report information about disaster-related fraud,” said Donald J. Cazayoux Jr., U.S. Attorney for the Middle District of Louisiana and Executive Director of the NCDF. ”Moreover, it provides law enforcement agencies with an efficient centralized process for receiving those complaints — whether by phone, email, fax, or letter — and referring matters to the appropriate agencies for investigation.”

Complaints received by the NCDF to date encompass 49 states, three territories, three foreign countries and 32 named disasters, including hurricanes, severe storms, floods, earthquakes, tsunamis and wildfires.

The Disaster Fraud Task Force includes the criminal, civil and antitrust divisions of the Department of Justice; U.S. Attorney’s Offices throughout the country; the FBI; the Internal Revenue Service Criminal investigation Division; the U.S. Postal Inspection Service; the U.S. Secret Service; the Federal Trade Commission; the Securities and Exchange Commission; the Department of Homeland Security Office of Inspector General and Inspectors General from 19 other federal agencies; and representatives of state and local law enforcement.

For more information, read the Disaster Fraud Task Force Report, 2011 (PDF)..

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