Legal Thriller Author Reveals Easy Ways to Spot Natural Disaster Rip-Offs1

By Jack Payne
Amateur con artists of all stripes find that conning the government is the easiest scam of all Finagle's Law of Bureaucracy: The first myth of management efficiency is that it exists, worked well for the exploiters of Hurricane Katrina.

When Hurricane Katrina ravaged New Orleans in 2005, rank amateur con artists had a field day, not even needing the benefits of any particular rip-off training. Collectively they ripped about everything ripable from FEMA's pockets, including the lining. Here is just a sampling of the "enrichment activities" which took place at taxpayer expense as reported by a Senate Investigating Committee:

> An unbelievable 33% of the 2.5 million total applications for all forms of individual assistance were duplicates. That's right, nearly 1 million cases of fraud. Extraordinary.

> Government auditors, using bogus identities, false addresses, and creative disaster stories--for practice--were able to obtain their own $2,000 checks. No questions asked.

> Of 200 home addresses listed as hurricane damaged, 80--a staggering 40%--turned out to be nonexistent apartments or vacant lots.

> Twenty people used 35 bogus social security numbers to rake in more than $100,000 in payment-loot.

> Almost half of 11,000 people who were issued special debit cards good for $2,000 each as survival funds, got a second $2,000 windfall.

> More than half of a group of 250 collected using phantom social security numbers--numbers which had never been issued.

> Use of the social security numbers of dead people proliferated.

> Many cases were found of the special electronic debit cards being used to pay for jewelry, bail bond services, a .45-caliber handgun, and "adult entertainment" of some form or another. This part of the story reads more like fiction, like from a legal thriller.

In the aftermath of Hurricane Katrina, almost simultaneously with residents streaming out of New Orleans, a wave of illegal immigrants streamed in. Many of the clean-up jobs were taken by these people, no doubt extending the massive fraud, due to the known, high quantity of fake social security number use in their ranks.

End in sight? Who knows? After a 2-year struggle, the Homeland Security Dept. is still trying to get a handle on it. Being a cumbersome, lumbering government agency, one should not hold one's breath in wild-eyed anticipation Con artists are not the only ones who know that dealing with the government is like kicking a 300-pound sponge.

Oddity is, some 80 years before--in 1925--New Orleans was devastated by an almost identical hurricane-disaster. Not a penny came out of the Federal Treasury to bail the city out of that one. Nonetheless, somehow, the city got rebuilt. Obviously, with no federal bailout, no funds were available for fraud. So, the outcome was entirely different on that score too. How times have changed!

The Con Man's Blog, and first two chapters of Jack Payne's legal thriller book, Six Hours Past Thursday, are now available online. Both readable for free. You are invited. www.sixhrs.com

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