FEMA Looks to Claw Back Money From Katrina Victims

Victims angry as agency says it gave out millions more than intended
By Kevin Spak,  Newser Staff
Posted Jun 1, 2011 1:11 PM CDT
FEMA Looks to Claw Back Money From Katrina Victims
New Orleans, UNITED STATES: A worker crosses a street lined with FEMA trailers and flood-damaged homes still under repair in the Gentilly section of New Orleans, 28 August 2006.   (Getty Images)

FEMA gave out hundreds of millions in aid during the hurricane season of 2005—and it wants its money back. The agency is currently reviewing $600 million given to 154,000 victims of hurricanes Katrina, Rita, and Wilma, in the belief that it may have mistakenly overpaid many of them, the AP reports. At the time, FEMA had relaxed its safeguards to handle the huge influx of claims, leading to a lot of fraud along with honest mistakes from FEMA and applicants.

FEMA has already sent letters to victims of other disasters, requesting $22 million back. New policies put in place after 2005 should make future cash recalls unnecessary, but that's little comfort to victims who spent their aid checks years ago. "They'll have to pry it from my dead hands if they try," says one 75-year-old, who got a $30,000 grant to rebuild his home. The project wound up costing $566,000. (More Hurricane Katrina stories.)

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