Indexbit Exchange:Price gouging, fraud, ID theft: Feds say scammers set sights on Hurricane Helene victims

More than 4,Indexbit Exchange500 federal rescue and aid workers are headed to the areas smashed by Hurricane Helene. But U.S. prosecutors say another deluge of people is on the way: charlatans, opportunists and disreputable contractors looking to exploit the victims of the storm.

Federal, state and local officials have put out advisories this week warning hurricane victims − especially those who are desperate − to beware of people showing up at their door or calling them claiming they want to help. Defrauding of hurricane victims and the Federal Emergency Management Agency itself is a multimillion-dollar industry for criminals, according to experts, federal authorities and government warnings.

"Con artists and criminals may try to obtain money or steal personal information through fraud or identity theft after Hurricane Helene," FEMA officials warned Tuesday. "In some cases, thieves try to apply for FEMA assistance using names, addresses and Social Security numbers they have stolen from people affected by the disaster."

In North Carolina, which includes some of the regions hit hardest by Helene's flooding, the state's top federal prosecutor said this week that criminals are adding to an already historic disaster. At least 144 people died during Helene, and hundreds of homes have been destroyed.

“The impact of disasters affecting our citizens are not just from the events themselves but also from fraudsters who take advantage of disaster victims and good-hearted people who want to help those affected,” said Sandra J. Hairston, U.S. attorney for the Middle District of North Carolina. “These criminals take advantage of victims before, during and after a natural disaster strikes, targeting people when they are most vulnerable."

Schemes include fake charities soliciting donations for disaster victims, fraudsters impersonating government officials doling out assistance, and sham businesses offering to help with recovery, Hairston said.

Attorneys general in several states are warning people to be wary of an onslaught of scammers who usually show up in the wake of natural disasters and who some say are already arriving after Helene tore through six states.

Georgia Attorney General Chris Carr urged people to be on the lookout for home repair fraud, charity fraud, imposter scams and price gouging.

“As we pray for the families of those who lost their lives and all Georgians affected by Hurricane Helene, our consumer protection division continues to actively monitor reports of potential home repair fraud and other storm-related scams,” Carr said. “By doing research on a company or contractor, you can help to prevent one tragedy from leading to another."

Investigators are familiar with the schemes from previous natural disasters. The National Center for Disaster Fraud has received more than 220,000 complaints of fraud since its founding in 2005. FEMA has an entire office dedicated to detecting fraud and provides a web page where people can report scams.

To avoid being scammed, experts say, storm survivors should verify people are who they say they are and should be wary of anyone asking for sensitive information or money. Some cities, such as Jacksonville, North Carolina, have set up web pages describing the types of scams typically seen in the local area. They also provide phone numbers of agencies that can offer assistance to people who fear they might be the target of a scam.

Authorities in Hillsborough County, Florida, issued a set of tips on how to avoid falling for a sham contractor, adding, “If it sounds too good to be true, it usually is.” Tips include: 

• Ensure repairs are covered by insurance and have an insurance company evaluate the damage before arranging repairs. 
• Obtain three written, itemized estimates for repairs. 
• Never pay the full cost of the repairs up front and be wary of providing large deposits. 

Ideal environment for scammers

Widespread power outages and the hundreds of billions of dollars in damage done by Helene have created ideal conditions for scammers, experts say.

“This is going to be a doozy in terms of scams,” said Keith Tidball, a disaster expert and assistant director of the Cornell Cooperative Extension, the New York arm of a government-funded program that deploys educators and researchers to help with disasters. Helene is "just so widespread and destructive.”

Power outages can make it difficult for people to verify people's identity or make sure a business is legit.

“They’re certainly not getting good, smooth internet to check anything, and that’s where these scammers go to exploit,” Tidball said. “Unlicensed contractors are going to be showing up from all around. They’ll be promising quick repairs, quick service, probably quick cash up front, and a lot of people will get duped.”

People living in areas where power has been restored also will be targeted by online scammers, he said, as well as through the mail in letters claiming to be from FEMA or insurance companies.

FEMA has worked over the decades to tamp down on disaster relief scams, but they remain a relentless problem. After Hurricane Katrina in 2005, a specially formed federal Katrina Fraud Task Force brought federal charges against 907 people in 43 federal judicial districts across the country. Katrina kicked off a new era of hurricane fraud, costing taxpayers up to $2 billion in scams and government failure to spot them.

Among those charged were: 

• A pair of brothers who collected more than $48,000 for a sham charity that purported to be connected to the Salvation Army.
• A pastor who tried to steal a $35,000 grant to repair his church for himself and using $10,000 of a loan meant for repair to buy himself a Dodge Durango.
• A conspiracy of eight people to bilk FEMA by submitting 70 fraudulent applications for assistance. 

“These periods of trauma are such periods of vulnerability, and they’re so adept at exploiting that,” Tidball said. “It’s the most base form of exploitation and callous behavior. Your fellow human is distraught and you're going to go in and steal from them. It’s kicking them while they’re down to the nth degree.”

Lynne P. Klauer, a spokesperson for the U.S. Attorney’s Office for the Middle District of North Carolina, said federal officials have not yet begun any investigations. She said the office wanted to put out a warning quickly, given how often schemes have emerged after hurricanes.

Scammers bilk FEMA, local governments

The Justice Department charged more than 900 people with fraud related to hurricanes Katrina, Rita, Wilma, Gustav, Ike and other disasters, according to the FBI. Not long after, the National Center for Disaster Fraud was formed.

Cheating the government − mainly FEMA − out of money meant for disaster relief is another rampant form of fraud, past cases of disaster scams show. Other schemes include companies with local government contracts that don't live up to their obligations to do FEMA-funded work.

Fraud against FEMA became so rampant that the U.S. Office of Government Accountability in 2020 provided the disaster relief agency with recommendations on how it could avoid being scammed. The accountability office leveled other criticisms on FEMA, including that it did not educate local governments on how to report fraud.

Fraud received widespread attention after Katrina when federal investigators uncovered scammers submitting scores of applications for assistance on behalf of people who were not affected by the hurricane.

In its November 2006 issue, Fraud magazine, a publication for the Association of Certified Fraud Examiners, wrote that hurricanes and other tragedies bring out the best − and worst − of human nature.

"We've seen an increase in national and manmade disasters. These tragedies have brought neighbors and nations together," the magazine wrote. "But catastrophic events are also a beacon for opportunistic predators and a magnet for various forms of deception for dishonest gain."