Penalties Increase for Disaster Related Fraud

The House on Wednesday unanimously passed legislation making it a crime punishable by up to 30 years in prison to fraudulently seek disaster assistance. The bill also increases fines to $1 million for mail and wire fraud when those methods are used to get bogus disaster aid, placing the offense on par with bank fraud.

The Senate passed the bill earlier this month, and President Bush is expected to sign it.

The Justice Department asked Congress to develop a new category of fraud after the number of cases following Hurricanes Katrina and Rita in 2005. The Government Accountability Office has estimated that $1 out of every $6 FEMA initially paid out in the two storms was claimed improperly in a wave of fraud amounting to billions of dollars. |Read on|