More Than 900 Charged with Katrina, Rita Fraud

More than 900 people across the United States have been charged with crimes relating to contracts or false claims for government help associated with Hurricanes Katrina or Rita, according to a new report by the Justice Department.

The Katrina Fraud Task Force, operated by the Justice Department, also has received 667 calls relating to possible fraud from Hurricane Gustav and another 466 complaints regarding Hurricane Ike.

One of the indictments alleging a false claim in Galveston for Hurricane Ike involved a woman the Justice Department said also had filed a fraudulent claim for disaster assistance during Hurricane Katrina.

Among the Katrina-related cases were instances of people creating fake disaster charities and a scheme in which people signed up themselves and others for disaster benefits to which they weren't entitled. The government says the vast majority of the Katrina cases have resulted in guilty pleas or guilty verdicts.

"Whenever a natural disaster strikes, there will always be unscrupulous people willing to take advantage of victims' assistance and rebuilding efforts," said Matthew Friedrich, acting assistant attorney general for the Justice Department's Criminal Division and chief of the Katrina Fraud Task Force.

Among the cases cited in the Justice Department report:

• On May 15, a federal grand jury in New Orleans indicted Kern Carver Bernard Wilson, a former contract employee for the U.S. Army Corps of Engineers, and Durwanda Elizabeth Morgan Heinrich, a dirt, sand and gravel subcontractor, for participation in an alleged bribery scheme related to the awarding of a contract for the Lake Cataouatche levee, south of the city.
  
• On Nov. 28, 2007, two brothers in South Texas -- Stephen Stephens, 24, and Bartholomew Stephens, 27 -- were sentenced to 111 months and 105 months in prison, respectively, for operating a Web site that purportedly raised money to help the Salvation Army aid Hurricane Katrina victims. The fraudulent Web site, the Justice Department said, collected $48,000 before its accounts were frozen.
  
• On Sept. 30, Phyllis Ann Taylor, 28, currently of Houston, was charged with filing a fraudulent claim for Federal Emergency Management Agency assistance for damages purportedly caused by Hurricane Ike, three years after the Justice Department said she filed a fake claim for disaster damage to a public housing residence in Marrero that suffered no damage in Katrina.
  
• Last week, Noah A. Thomas Jr. of Marrero, who was pastor of the Pilgrim Missionary Baptist Church in New Orleans that was heavily damaged by Hurricane Katrina, was sentenced to 17 months in prison for pocketing a $35,000 grant from a fund operated by former Presidents Bill Clinton and George H.W. Bush that was supposed to pay for repairs to the church. According to the Justice Department, Thomas had the fund's check mailed to his house and then deposited into a bank account he established and controlled.
  
• In June, a federal judge in Texas sentenced eight defendants in what the Justice Department says was a conspiracy to file disaster applications on behalf of 70 residents who were not victims of Hurricanes Katrina or Rita. The ringleader of the plot was sentenced to 33 months in prison and ordered to pay $92,958 in restitution and forfeit the Lincoln Navigator she purchased with the fraudulent funds.

"Those who would try to profit from the misfortunes of disaster victims should know that the Department of Justice, federal investigative agencies and inspectors general will continue their aggressive pursuit of disaster fraud," said Friedrich, head of the Justice Department's criminal division.