Charity Fraud - Hurricane Katrina

To find massive fraud look where a bureaucracy is handing out cash. Our generosity with the victims of hurricane Katrina was rewarded with thousands of fraudulent claims. And the bureaucracy pumped cash at the frauds.

USA Today covers it.

Federal agents investigating widespread fraud after the Gulf Coast hurricanes in 2005 are sifting through more than 11,000 potential cases, a backlog that could take years to resolve.

Authorities have fielded so many reports of people cheating aid programs, swindling contracts and scamming charities after the hurricanes that Homeland Security inspectors, who typically police disaster aid scams, have been "swamped," says David Dugas, the U.S. attorney in Baton Rouge.

"There's definitely a backlog," says Dugas, whose office helps coordinate an anti-fraud task force formed after the hurricanes. "Right now, that means we might not get to some cases as quickly as some people might like. If there's still a backlog in two years when we start running up against the statute of limitations, that's different."

Hurricanes Katrina and Rita triggered more than $7 billion in disaster aid to Gulf Coast households, plus billions more in government contracts and rebuilding projects. Allegations of fraud have accompanied that assistance, and prosecutors have vowed zero tolerance for people who tried to cheat the government.

They are promising to clean up their bureaucracy. Won't happen.