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FEMA wants Katrina benefits back

More than 2,000 Mississippi residents were notified that they must repay millions of dollars in federal Hurricane Katrina benefits that were excessive or, in some cases, fraudulent.
/ Source: The Associated Press

Thousands of U.S. Gulf Coast residents have been told they must repay millions of dollars in federal Hurricane Katrina benefits that were excessive or, in some cases, fraudulent.

In Mississippi alone, the Federal Emergency Management Agency said it is seeking $4.7 million from 2,044 people, giving them 30 days to repay or set up a payment plan.

Some storm victims got duplicate or extra benefits because of FEMA errors, agency spokesman Eugene Brezany said, and others might have received benefits for expenses that later were reimbursed by insurance settlements.

Some others benefited "by intentional misrepresentation" or the mistaken belief that secondary residences qualified for payments, he said.

More people could get repayment notices as applications are reviewed, Brezany said. Recipients could have received $2,000 to $26,200.

James McIntyre, FEMA spokesman for Louisiana, could not immediately provide figures for his state or others hit by Katrina. Aaron Walker, the agency's chief spokesman, said in an e-mail he also could not immediately respond.

The form letter sent to the aid recipients said that they could appeal the charges. Even so, it said, "FEMA strongly encourages" them to pay the debt or set up a repayment plan to avoid being charged penalties or interest in case the appeal fails.

If the recipients do not repay the money or arrange a payment plan in four months, the U.S. Treasury will attempt to collect it, Brezany said.

Federal auditors have faulted FEMA for much of the benefit abuse after last fall's hurricanes, citing an inadequate accounting system. The federal Government Accountability Office has said thousands of inappropriate payments were made because people could repeatedly apply for and collect benefits.

In February, audits by the Government Accountability Office and the Department of Homeland Security found that as many as 900,000 of the 2.5 million applicants who received aid under FEMA's emergency cash assistance program — which included $2,000 debit cards given to evacuees — were based on duplicate or invalid Social Security numbers, or false addresses and names.

Also in February, the Justice Department said federal prosecutors charged 212 people with fraud, theft and other counts in scams related to Gulf Coast hurricanes.