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Fraudsters Want Some Of BP’s $20B Stash

From a suddenly suspicious Reuters:

Fraudsters angle for piece of BP oil spill fund

By Alexandria Sage

Sun Jul 25, 2010

BOOTHVILLE Louisiana (Reuters) – Swindlers, scammers and even a few strippers are flocking to the Gulf Coast in search of a piece of the $20 billion BP Plc has set aside to compensate residents for spill-related losses.

Adjusters passing out emergency funds in Louisiana and other Gulf Coast states are on high alert for fraud even as they pay out legitimate claims following the April 20 oil rig explosion and spill that killed 11 workers and devastated the livelihoods of many fishermen, tourism workers and others.

The promise of a handout has attracted the unscrupulous, who have flocked to the Gulf in a bid to cash in.

Huh. It makes one wonder if other free handouts don’t also attract “the unscrupulous.”

Scott Ward, assistant manager of the BP claims office in Boothville, Louisiana, recalls staring at the long, manicured fingernails of the purported deckhand who sat across his desk one day asking for compensation.

The woman, who was "all gussied up," bore little resemblance to the hardened workers he knew made their living on the water, Ward said.

"How can you separate shrimp with those nails?" he recalls thinking. "She had the proper documentation so we paid her, but you have to wonder."

Because, after all, documentation can never be faked. Just ask any illegal alien.

Another applicant was overheard telling fellow claimants in the waiting room she was a stripper on New Orleans’ famed Bourbon Street, said Burnell Alessi, the office’s manager.

"Every time we think we’ve seen it all, there’s a new one that comes in," Alessi said.

Well, aren’t strippers being hurt by the spill, as well? Haven’t their usual clients — the local workers and tourists — been affected? ‘Sex workers’ probably have a more legitimate claim than many who are getting the money.

BP has so far paid $201 million out of its $20 billion fund to residents and businesses in Gulf Coast states. Fishermen and shrimpers have received $50 million of that pie. But of the 114,000 claims submitted, nearly 54 percent, or more than 61,000, lack key documentation, according to BP


There are 36 claims offices throughout the Gulf states…

"You see people who haven’t been down here in 20 years showing up at that claims office," said shrimper Marvin Davis, who reported one out-of-towner trying to game the system.

In one scam making the circuit, boat captains vouch for purported out-of-work deckhands who then share with the captains a cut of their BP payment. Adjusters are now wise to the scheme, using a boat registration number that can show whether a boat with a capacity for four workers, for example, has a phantom crew of double that number — all seeking funds.

Applications for Louisiana commercial fishing licenses also reveal potential schemes in motion. The department of wildlife and fisheries processed applications for 85 such licenses on April 9th, about a week before the spill. A month later, that number rose 44 percent to 122 applications, following the news that BP would pay claims to fishermen with active licenses.

"Why would you need a commercial fishing license when you know the fishing is closed?" asked Ward.

BP has hired private investigators to follow up on questionable claims, said Mike Thompson, director of investigations at the Louisiana Attorney General’s office. Some will likely be passed along to local district attorneys.

Yes, remember all the convictions that came out of the billions of dollars in fraud from after Katrina? We don’t either.

Fraud is not only directed at BP — local residents are also potential victims. The Federal Trade Commission recently warned that scammers were likely to go door to door, or use email or websites, to solicit funds for fraudulent environmental causes or pretend to be authorized adjusters who need upfront fees to expedite claims.

Again, just like after Katrina. Why can’t the government clamp down on real problems like this?

Locals say the word is out, and even the undeserving are scrambling to get a piece of the pie.

"If doesn’t take long in a community like ours — we call it the Cajun grapevine — to find out exactly what you need to get a check," said Alessi. "I’m certain quite a few people have gotten payments they shouldn’t have."

But who cares? Even if it isn’t taxpayers’ money this time around, the costs will be passed on to consumers. So nobody really gets hurt. It’s a ‘victimless crime.’

And of course the federal government has husband its limited resources to go after the bigger crooks. And no matter the crime, it seems that there are always bigger crooks.

This article was posted by Steve on Sunday, July 25th, 2010. Comments are currently closed.

7 Responses to “Fraudsters Want Some Of BP’s $20B Stash”

  1. canary says:

    I would think the proper documents would be ten years of accounting, tax returns, pay stubs, employer information, insurance adjusters,
    & proof of residence and citizen-ship……….Since Obama set the standard of paying out quickly, I imagine nothing has to be shown.

  2. proreason says:

    More redistribution…..and don’t think the Moron isn’t aware of it.

    Just for fun, let’s think it through. Who mans the “36 offices”. If it’s BP, then there is some hope that the reparations payments will be managed, because BP will have an incentive to only pay legitimate claims. But if the gubamint is managing the offices, why on earth would anybody think that even a tiny fraction of the payout would be legitimate? To the contrary, the incentive would be 100% to cooperate with crooks and get your gubamint piece of it. Except of course for those honest bureaucrats who have the best interest of the citizenry in mind.

  3. Gladius et Scutum says:

    The BP Claims website (a pdf file) notes that their claims process is under direction of the US Coast Guard. And guess who their Commander and Chief is? On June 15, Robert Gibbs said that it would be best to take the claims process away from BP entirely.

    One of the documents they accept is a “wage loss statement” I’m an auditor. The closest thing I can think of to this is merely a written statement from an individual (or their employer) stating that they lost wages. Kinda like the three million jobs I saved.

    There are ways to trip up an awful lot (but not all) scammers. One is to have a cookie jar full of random, detailed questions available and to use them randomly. The manicured woman at the start of the story might be asked if she missed the smell of diesel fumes. Then she realizes she doesn’t know if the boat uses gasoline or diesel. “uh, uh, uh” and its time to confront her. The story gets around, so you keep changing the questions. Of course, then BP gets accused of harassing the victims. “Making them victims again!”.

    If the Feds really wanted to fight fraud in this case, every single claim would be run against a database of people (and other data bits) that were “red flagged” after Katrina. But, of course, they don’t want to fight fraud, they want the “final crisis of capitalism”.

  4. NoNeoCommies says:

    No! No! No! No! No!
    You guys are sooo off message!
    You are supposed to be dragging poor, suffering slobs that haven’t been payed yet, despite submitting paperwork, before the cameras and microphones in order to make BP look heartless and evil!
    No one wants to see or hear about scammers and fraudsters unless the money comes out of their own wallet.

    Now get back on message!
    Hammer BP relentlessly until they hand out cash to anyone who stands in line long enough to reach the paymaster.
    Don’t even make them provide information that might allow the IRS to know they “earned” money this year.

  5. actor111 says:

    Fraud? When the government is handling money! I’m like Inspector Louis Renault in “Casablanca.” I’m shocked!

  6. proreason says:

    Speaking of frauds, Rush today had the best interpretation ever of the 2008 financial meltdown:


    This monologue is well worth a careful reading. The only think I wish he had said differently would be to tie it more closely to the Moron’s election. He does link it, but seems to think it wasn’t as directly connected as I’ve always maintained. Remember, the poop really hit the fan the very next business day after McLame’s convention triumph, and came to a head 10 days after that.

    • Rusty Shackleford says:

      Yup, he summed it up pretty well today and laid it firmly in the lap of the socialists. Everyone who wants to know what happened and why and how should read that. I listened today while at lunch and nodded until I thought my head would fall off.

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