11:43 AM CST on Monday, February 13, 2006

Associated Press

Since Hurricane Katrina hit on Aug. 29, the Federal Emergency Management Agency has obligated or otherwise spent roughly $22 billion of the $36.6 billion in federal money it received for hurricane-related contracts, grants and other disaster aid.

In two audits, government investigators found that:

--The $2,000 debit cards issued to hurricane evacuees for emergency supplies were often used for purchases unrelated to disaster aid, including: adult entertainment, gambling, a $450 tattoo, a .45-caliber handgun for $1,300 and a diamond engagement ring for $1,100.

--There was little or no verification of the names, addresses or Social Security numbers of applicants registering by phone or the Internet for the $2,000 in aid, resulting in thousands of checks issued to those with duplicate or bogus information.

--Duplicate payments were made to about 5,000 of the nearly 11,000 debit card recipients who received Katrina aid, first with debit cards and then again via electronic bank transfer.

--Discrepancies were abound in FEMA's documentation of the number of travel trailers ordered, received and occupied, making it difficult to ascertain the exact units available or whether government-owned property was otherwise accounted for.

--FEMA may have bought too many temporary homes -- 24,967 manufactured homes obtained for $857.8 million and 1,295 modular homes at $40 million -- resulting in 10,777 such homes sitting empty in Hope, Ark., in sinking mud without proper storage. "It was unclear how the decision was made," the Homeland Security audit stated.

Separately, the Justice Department's Hurricane Katrina Fraud Task Force reported that 212 people have been charged in schemes involving fraud, identity theft, theft of federal funds and public corruption. Forty have pleaded guilty. Among the report's other findings:

-- FEMA has collected more than $6.1 million in disaster-assistance money returned from people who were ineligible to receive it. The Red Cross has collected about $1.9 million in returned money.

-- The FBI has shut down 44 "questionable" Web sites that purported to be involved in hurricane relief.

-- The Secret Service has shut down 16 Web sites in which the people operating them were accused of trying to harvest personal data for identity theft and fraud.

(Copyright 2006 by The Associated Press. All Rights Reserved.)