FEMA wants at least $5.8 million in Sandy aid repaid

NEW YORK -- Thousands of people who received government aid after Superstorm Sandy slammed the East Coast may be forced to give some or all of that money back, nearly two years after the disaster.

The Federal Emergency Management Agency is scrutinizing about 4,500 households it suspects received improper payments, according to program officials and data obtained by The Associated Press through a records request. As of early September, FEMA had asked about 850 of them to return a collective $5.8 million. The other cases were under review.

FEMA's campaign to recover overpayments, called "recoupment" in government lingo, involves instances where the agency believes a household received more money than allowed under program rules, but not necessarily through an attempt to cheat the system. Fraud cases are handled separately.

Many people asked to return money were deemed ineligible for aid because damaged properties were vacation houses or rental properties, not primary homes. Others had double-dipped into the aid pool, with more than one household member getting payments. Some received money for things later covered by insurance.

In all, about $53 million in payments are under review. That's a fraction of the $1.4 billion that storm victims received. But that is no consolation to many homeowners.

As of July 30, the average demanded refund was $6,987, a sum that could be difficult for many to produce, given the modest income of most aid applicants. About half the households under scrutiny reported an annual gross income of $30,000 or less.

"For most people, the money is long gone and long ago spent on storm recovery," said Ann Dibble, director of the New York Legal Assistance Group's storm response unit, which has been helping about a dozen families fight a FEMA clawback.

The list of people asked to return cash includes Gary Silberman of Lindenhurst, New York, who got a letter last November demanding just under $17,000. The agency said he was ineligible partly because he and his elderly father had both applied for disaster funds even though they were living together.

The Silbermans were also ineligible for some types of aid because they had failed to buy flood insurance after getting $25,000 from FEMA for flood damage during Hurricane Irene a year earlier.

Silberman says he should still qualify for the money because he was a rent-paying tenant in his father's house, not a dependent, but FEMA has so far rejected his appeals.

"I lost my home. I lost everything. I don't have $17,000 to give back," Silberman said.

Sandy was among the costliest hurricanes in U.S. history. More than 280 people died in the U.S. and the Caribbean. When the storm struck the New York and New Jersey coastlines, the surging ocean poured into densely populated seaside neighborhoods and turned entire communities into soggy, moldy wrecks.

About 179,000 households in New York and New Jersey received FEMA payments following the storm. The agency is also reviewing payments to some households in Connecticut, Maryland and Rhode Island.

In mobilizing for Sandy, FEMA had hoped to avoid problems that plagued the aid distribution process following Hurricane Katrina's blow to the Gulf Coast in 2005. That destructive storm forced the overwhelmed agency to relax internal controls to speed up relief efforts. That, in turn, led to huge numbers of people getting money they shouldn't have received.

FEMA's attempts to recover hundreds of millions of Katrina-related dollars, often from people who couldn't afford to pay, led to a court fight and a procedural overhaul. By 2011, the agency had mailed out letters to at least 90,000 households asking for refunds. Congress authorized the agency to waive much of that debt.

The agency says it has since gotten better at making sure aid goes to the right people and in proper amounts.

"They have a lot more controls in place," said John Kelly, the Department of Homeland Security's assistant inspector general for emergency management oversight.

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Kunzelman reported from Baton Rouge, Louisiana

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The AP National Investigative Team can be reached at investigate(at)ap.org