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Widespread Fraud Following Natural Disasters

In the aftermath of a devastating natural disaster, such as Hurricane Irma, we see different sides of our community, neighbors, and friends emerge once the storm has passed. Many people come out to support affected areas by collecting goods, offering free or discounted services, or donating money to disaster-relief charities. Others come out after the disaster looking for ways to fraud a system and take advantage of ways to make extra money from vulnerable victims or government recovery efforts.

Following a disaster, there are several ways that people take advantage of the chaos and vulnerability of the situation. One way that we've talked about before is looting, but another more subtle crime that happens is through fraud. There are lucrative ways to steal through scams against insurers, government agencies, and even through charities.

After Hurricane Katrina in 2006, the Government Accountability Office found up to $1.4 billion of disaster-relief payments made by the Federal Emergency Management Agency (FEMA) were possibly fraud. Though many fraudsters are intentional, there may be ways that people are committing fraud without even realizing it.

Here are some reminders of what not to do following a disaster to avoid being accused of fraud.

  • If you receive funds from a government agency such as FEMA for relief efforts, do not use those funds for personal lifestyle extravagances such as vacations, expensive liquor or clothing, or any other item that the funds are not intended for use. Any disaster relief funds should be used toward recovery and rebuilding following a disaster.
  • Don't impersonate a charity of any kind to raise personal funds following a disaster. According to the Washington Post, investigators found approximately 5,000 questionable Katrina-related websites after the storm nationwide. If you set up a charity website to raise funds to help others, make sure that everything you do is legal and the funds go where you say they will.
  • If you are a contractor looking for work following an event such as a storm, make sure that you are licensed, insured, and that you do the work that you promise to do. Do not take money up front and then fail to complete a job. Do not promise to do work that you are not licensed to do.
  • Do not make fake insurance claims for property you do not own, or claim to live in a home that you do not live in. These are ways that you can be accused of committing fraud against an insurer.
  • Do not steal an identity to make a claim. Make sure that any claims you make for government resources or insurance purposes come from you, and that you are not making claims on another's behalf, especially if that person is not someone who lives in your home.
  • If you are in public service or reconstruction services, watch for public corruption and collusion. Make sure all contracts for goods and services are legal, and that all goods are delivered to the proper destination. Do not resell items unless you are legally allowed to do so.
  • Business owners should be careful about price gauging and other supply-related scams. Not only can this be unethical and tarnish your reputation in a community, but there are also ways that these practices can get you in more trouble with the law.
  • When filling for assistance, business owners should also be careful not to falsify any documents related to employee manifests, tax forms, or invoices. By providing incorrect information to government agencies or insurers, it can be perceived that you are attempting to commit fraud.

Federal prosecutors are ready to act aggressively against fraudsters following a natural disaster. If you are unsure if something is fraud or not, it is better to err on the side of caution. If you have been accused of committing fraud in the aftermath of a storm or other disaster, it's important that you contact an experienced criminal defense attorney. Your attorney can help you better understand the charges against you and help you navigate the criminal justice system.

References:

Hurricanes provide plenty of opportunities for scams. (2017, September 14). Retrieved September 22, 2017, from https://www.economist.com/news/united-states/21728967-federal-government-has-prosecuted-more-1000-cases-katrina-related

U.S. Attorney in Tampa: 'Zero tolerance' for disaster fraud. (n.d.). Retrieved September 22, 2017, from https://www.bizjournals.com/tampabay/news/2017/09/14/u-s-attorney-in-tampa-zero-tolerance-for-disaster.html

Jackman, T. (2017, September 08). Fraud inevitably follows disasters, so authorities in Texas, Florida prepare for post-storm scams. Retrieved September 22, 2017, from https://www.washingtonpost.com/news/true-crime/wp/2017/09/08/fraud-inevitably-follows-disasters-so-authorities-in-texas-florida-prepare-for-post-storm-scams/?utm_term=.ad4a5e1c4984

Cutway, A. (2017, September 13). How to avoid post-Hurricane Irma fraud, scams. Retrieved September 22, 2017, from https://www.clickorlando.com/news/how-to-avoid-post-hurricane-irma-fraud-scams

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