More than 4,500 federal aid and rescue personnel are being deployed to areas severely impacted by Hurricane Helene. However, U.S. prosecutors are warning that a wave of fraudsters, opportunists, and questionable contractors is also heading towards the victims.

This week, officials at federal, state, and local levels issued alerts to those affected by the hurricane, particularly those in desperate situations, urging them to be cautious of individuals showing up at their homes or contacting them, claiming to offer assistance. The fraudulent schemes targeting hurricane victims and the U.S. Federal Emergency Management Agency (FEMA) have become a multi-million dollar enterprise for criminals, experts and government sources indicate.

“Scammers and criminals may seek to steal money or gain personal information through fraud or identity theft following Hurricane Helene,” FEMA representatives cautioned on Tuesday. “In some instances, thieves may try to apply for FEMA assistance using stolen names, addresses, and Social Security numbers from storm victims.”

In North Carolina, particularly in regions heavily affected by Helene’s flooding, the state’s leading federal prosecutor noted this week that criminals are compounding the impact of an already devastating disaster. The storm has claimed at least 144 lives and destroyed numerous homes.

“The consequences of disasters do not only arise from the events themselves, but also from those who exploit disaster victims and well-meaning individuals trying to help,” remarked Sandra J. Hairston, U.S. attorney for the Middle District of North Carolina. “These criminals prey on victims before, during, and after disasters, targeting individuals when they are at their most vulnerable.”

Hairston pointed out that scams can take various forms, including fake charities asking for donations for hurricane victims, impersonators posing as government officials offering assistance, and fraudulent companies claiming to aid in recovery efforts.

Attorneys general across several states are cautioning residents to remain vigilant against a surge of con artists, as scammers typically swarm to disaster-struck areas, and some are already appearing following Helene’s path through six states.

Georgia Attorney General Chris Carr advised residents to be aware of home repair fraud, charity scams, impersonation frauds, and price gouging.

“While we extend our thoughts to the families of those who lost loved ones and all Georgians impacted by Hurricane Helene, our consumer protection division is actively tracking reports of possible home repair scams and other storm-related fraud,” Carr stated. “Conducting research on a business or contractor can prevent one disaster from exacerbating another.”

Authorities have experience with these scams from previous natural disasters. Since its inception in 2005, the National Center for Disaster Fraud has received over 220,000 fraud complaints. FEMA has established a dedicated office for fraud detection and offers a webpage for reporting scams.

To avoid scams, experts recommend verifying individuals’ identities and being cautious of anyone asking for sensitive information or money. Certain cities, like Jacksonville, North Carolina, have created web pages detailing common local scams and providing contact information for agencies ready to assist those who suspect they might be targeted by a fraud scheme.

Officials in Hillsborough County, Florida, have shared tips on how to steer clear of fraudulent contractors, emphasizing that “if it seems too good to be true, it usually is.” Recommended precautions include:

• Confirm that repairs are covered by insurance and have an insurance agent assess the damage before proceeding with repairs.
• Collect three written, detailed estimates for any repairs.
• Avoid paying the entire cost of repairs in advance and be cautious of large upfront deposits.

Helene Sets the Stage for an Influx of Scammers

The widespread power outages and the extensive damage, totaling hundreds of billions of dollars from Helene, have created a perfect breeding ground for scammers, based on expert opinions.

“This situation is going to lead to a surge in scams,” commented Keith Tidball from the Cornell Cooperative Extension, which is a government-funded initiative that trains educators and researchers in disaster response. He noted that Helene’s impact is “immense and widespread.”

Power outages complicate the ability of individuals to verify identities or ensure a business’s legitimacy.

“People are unlikely to have reliable internet connections to check anything, which makes it easier for scammers to take advantage,” Tidball explained. “Unlicensed contractors are likely to arrive from various locations, promising quick repairs and requiring upfront payments, leading many to fall victim to scams.”

Residents in areas where power has been restored will also face risks from online scammers and fraudulent mail posing as FEMA or insurance companies, he added.

FEMA has taken significant steps over the years to combat disaster relief fraud, yet the issue persists. After Hurricane Katrina in 2005, a specially formed federal Katrina Fraud Task Force charged 907 individuals across 43 federal judicial districts for fraudulent activities. The aftermath of Katrina initiated a new wave of hurricane-related fraud, costing taxpayers up to $2 billion due to scams and governmental oversight failures.

Notable cases included:

• Two brothers who fraudulently raised over $48,000 for a fake charity that claimed to be linked to the Salvation Army;
• A pastor who attempted to misappropriate a $35,000 repair grant for personal use and spent $10,000 of a repair loan on a Dodge Durango;
• An eight-person conspiracy that tried to defraud FEMA by filing 70 counterfeit assistance claims.

“During these traumatic times, individuals are particularly vulnerable, and scammers are highly skilled at taking advantage of that,” Tidball remarked. “This represents the lowest form of exploitation and a complete lack of empathy. It’s despicable to take advantage of someone in distress. It’s like kicking someone when they’re already down—it’s utterly heartless.”

Lynne P. Klauer, a spokesperson for the U.S. Attorney’s Office for the Middle District of North Carolina, stated that federal investigations have not yet commenced. She emphasized the importance of issuing a warning promptly, given the frequent emergence of scams following recent hurricanes.

Fraudulent Activities Targeting FEMA and Local Governments

The Justice Department has prosecuted over 900 individuals for fraud linked to major hurricanes like Katrina, Rita, Wilma, Gustav, and Ike, as noted by the FBI. This was part of the impetus for the establishment of the National Center for Disaster Fraud.

Another prevalent method of deception involves defrauding the government—primarily FEMA—of funds designated for disaster recovery. Past instances have revealed other tactics, such as contractors failing to fulfill their commitments under local government contracts for FEMA-funded projects.

The issue of fraud against FEMA became so serious that, in 2020, the U.S. Office of Government Accountability made recommendations to the disaster relief agency on how to prevent such scams. They pointed out additional shortcomings, including FEMA’s failure to educate local governments on how to report fraudulent activities.

Attention on fraudulent activities surged after Hurricane Katrina when investigators found that some fraudsters submitted multiple applications for aid on behalf of individuals who were never affected by the disaster.

According to the November 2006 issue of Fraud Magazine, which is published by the Association of Certified Fraud Examiners, both the good and the bad sides of human nature are revealed during disasters such as hurricanes.

“The frequency of national and man-made disasters is increasing. These tragic events often unite communities and nations,” the magazine noted. “However, they also attract opportunistic fraudsters and various deceptive practices aimed at dishonest profits.”