08:47 AM CST on Tuesday, February 28, 2006

Associated Press

BATON ROUGE -- A Virginia company that did not even exist was paid $5.2 million by the Federal Emergency Management Agency to set up a base camp for disaster relief workers, but most of the work was never done, authorities alleged.

On Monday, U.S. District Judge James Brady froze the assets of Lighthouse Disaster Relief and owners Gary Lee Heldreth and Kerry Lynn Farmer after the Justice Department claimed the money was being spent on vehicles and checks were being cashed $10,000 at a time.

Lighthouse was one of two companies that bid on the contract to provide food and shelter for 1,000 emergency workers in St. Bernard Parish days after Hurricane Katrina hit the Gulf Coast Aug. 29.

Although the company had no experience in base camp construction and operation, it promised federal authorities it could deliver one in two days, according to papers. According to the lawsuit, the facility wasn't ready for any residents until Oct. 2 and never was able to support more than 400 people.

Investigators found that Lighthouse Disaster Relief was not even incorporated until October 2005 a month after it won the FEMA contract, according to the court filing.

Neither Heldreth nor Farmer could be located Monday for comment.

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