$485M overpaid to storm victims-FEMA struggles to reclaim funds

http://www.usatoday.com/printedition/news/20070615/1a_lede15.art.htm

$485M overpaid to storm victims
FEMA struggles to reclaim funds

By Brad Heath
USA TODAY

The Federal Emergency Management Agency overpaid victims of the Gulf Coast hurricanes by at least $485 million and is struggling to reclaim the money from tens of thousands of people it says shouldn't have been given aid, a USA TODAY analysis shows.

Agencies such as FEMA routinely seek repayments after disasters, though never before has the government done so on such a massive scale. Disaster aid records show that FEMA has so far recovered $15.6 million — about 3 cents for every dollar its auditors have identified as being improperly paid.

A federal judge in New Orleans ordered FEMA late Wednesday to stop trying to collect any money until it gives aid recipients better explanations of what they owe. FEMA was reviewing the case Thursday, spokesman Aaron Walker said.

The order follows sharp protests from lawyers, lawmakers and residents still struggling to rebuild nearly two years after Hurricanes Katrina, Rita and Wilma obliterated much of the coast.

"FEMA should aggressively pursue cases of fraud and misuse of funds, but I think they have to keep that effort separate from harassing taxpaying, hardworking storm survivors to pay back money FEMA either put in their hands or encouraged them to take," said Sen. Mary Landrieu, D-La., who heads a disaster recovery subcommittee.

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