Tuesday, November 6, 2007

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

--How amateur con artists thrived after Hurricane Katarina, due to government ineptness

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!

A generally accepted sage-wisdom of life is: You don't want to be so intelligent that nobody can relate to you. Consequently, professionals in every field generally regard talented amateurs with respect. The top executives of NBA basketball were duly impressed with the court prowess of Kobe Bryant and LeBron James while they were still in high school. Corporations vigorously recruit computer nerds, engineers, scientists, and honor graduates of all stripes on college campuses yearly. Even the federal and state governments are constantly seeking talented amateurs from among the masses, to employ and train.

Not so in the con artists' profession. Here the sociopath professional regards the amateur with disdain, convinced he is incapable of developing any kind of workable shell game. He feels, in this field of endeavor, the amateur, not having the I.Q. of a postage stamp, would be the type who would hold up a bank with thumb and forefinger for a gun, forgetting to keep the hand in a pocket. It is therefore appalling to the professional con artist to see this army of not-ready-for-prime-time players charge forward in Louisiana with such stunning success.

Many lock-the-barn-door steps have been taken by Homeland Security since the August, 2005 hordes of amateur con artists were unleashed upon them. But sadly, an ominous, almost hysterical note of panic winds through these moves. There's a ring of resignation about them. Too patch-quilt! Too little! Too late!


Mr. Grudge said...

News of government incompetance such as this gives me the chills as we are the ones paying for this. The government is a "dumb" entitity incapable of performing its most basic tasks most of the time. That is why when crackpots purport that the "government" is involved in some sort of conspiracy, such as 9/11 conspiracy nuts, I laugh becuase not only can't the government do anything right, no one in the government can keep a secret, let alone a conspiracy on the scale of 9/11. Your posts are chilling, informative, and necessary. Thanks you.

Jack Payne said...

You're right, Mike.

I don't think anybody is ever going to pin down final figures on the Katrina bail out, which was, probably, the biggest fraud in the history of mankind, with the total cost going way up into the billions of dollars. This con job was done on such a massive scale that it's near impossible to put together the words to describe it.

Anonymous said...

I have been a supporter of some government programs that help the poor. But after reading this I am more skeptical of all government programs. It looks like this one was about the most poorly run government run program in my lifetime.

Warren M

Ione Hesber said...

All those people who filed duplicate claims had to know what they were doing. Well, most of them had to know. Wasn't there any kind of controls at all the government used before dispersing such a huge amount of money? This whole thing is such a sorry state that it defies any kind of logic whatsoever. How could this happen?

Keli said...

Amazing! It is always disheartening to hear of scam artists taking advantage of helpless victims. Much hasn't changed since the times of the carpetbaggers. Where there is opportunity, there are scams.

kab625 said...

I've met only one or two "displaced" con artists right after the hurricane. For some reason the world seemed to owe them a living. Free everything. They arrived in our City and entered our health care system. In fact, the physician's office I worked for was "fired" by one for not dispensing narcotics even though we had no access to his medical record to substantiate the need. I know it was hard for many, but the vultures certainly are still circling.

Glenn said...

Preying on natural disaster victims just shows how low some people are willing to go for their own benefits. Its completely disgusting to see how things function in today's world.

Angry Jenny said...

That was a pretty disturbing post, yet again this is a site dedicated to expose frauds. I'd rather know the truth though instead of being the fool to fall for scams that act as though they are doing the world a favor. Low, very low.

Get Loud, Get Active, Get Angry!

Jack Payne said...

Yeah, Keli, that' what it all boils down to: where there is opportunity there are scams. Just like Willie Sutton and banks, "Because that's where the money is."

And, yes, Ione, it is hard to believe that nearly 1,000.000 people who filed duplicate claims Did NOT know what they were doing.

That's a real interesting little story, Kathleen. I think the simple term you use, "Free everything" sums it up nicely. Unfortunately, this is prevalent thinking in much of America today--an assumed "right" of some kind.

Angry Jenny has labeled this site correctly: better to know about what goes on behind the scenes than to be kept in the dark.

sharyn said...

it's the low life of humanity that prey on the less fortunate., elderly, disaster victims, and the uninformed. must we put out backs to the wall and stand guarded at all times against those who use us as parasites.
what happened to growing up, go to school, get a real job and try your best. why is this thought not embedded in their minds.
Where in society do scam artists come from? Is 'artists' a correct term for sluggs? Let's call then scam sluggs.