Sept. 11 air-quality aid program rife with fraud, misuse

NEW YORK -- A $100 million federal program to reimburse New Yorkers for air conditioners, filters, vacuums and other air-purifying tools after the World Trade Center collapse is rife with fraud and abuse, government officials say.

As many as 90 percent of the more than 219,000 applications for reimbursement were filed by people not suffering from the effects of contaminated air, according to estimates from federal officials.

They say fraud has taken several forms: Some people have manipulated the program to score a free air conditioner, while con artists have posed as federal employees and sold air-purifying items to residents.

About $45.8 million has been paid out so far, and while many applications are legitimate, officials said millions have been paid to people scamming the system. The government is so concerned that it is sending a dozen teams of inspectors daily to applicants' homes to verify claims.

The government can turn cases over to prosecutors -- though none have brought charges -- or they can try to reclaim the money.

The grants were set up by the Federal Emergency Management Agency to reimburse residents in all five boroughs for the purchase of air quality items, up to about $1,500 per applicant.

Unlike other aid programs created specifically to address the Sept. 11 attack, the reimbursements came from an existing program. The program is traditionally used to help people with costs not covered by other assistance programs, but FEMA officials said they have never encountered this level of misuse in prior disasters.

The size and extent of the program have proven to be among its problems.

While many trade center grants were limited to residents of lower Manhattan, this program was open to all New York City residents.

"We were trying to do the right thing. Unfortunately people took advantage of that, so now we have people way out in Queens or upper Manhattan where there was no potential for air quality impacts," said Brad Gair, FEMA's trade center federal recovery officer.

As word spread about the ways to cheat the system, Gair said, a program that was originally budgeted at $15 million -- and initially had trouble attracting applicants -- turned into a $100 million monster.

"We know we've come across people who are not telling the truth," said Jack Casale, a FEMA investigator, during a day of visits to homes in Queens, more than 10 miles east of the trade center.

Scientists and federal environmental officials are still studying the effect of trade center dust and the path it took, but experts agree that the cloud hovered over lower Manhattan and spread mostly south toward Brooklyn.

Investigators have discovered numerous cases where people purchased FEMA-covered items, submitted the receipts to get reimbursement checks and then returned the products to the store, pocketing the cash. Some receipts even appear to have been forged, Gair said.

Home visits have turned up residents who applied for air-conditioner reimbursements living in buildings with central air where the windows do not even open. Other times, applicants who received checks for hundreds of dollars' worth of reimbursed purchases could not produce the items when investigators visited their homes; stores have reported unusual numbers of people returning air conditioners, vacuums and air purifiers.

Local district attorneys say no applicants have been charged in connection with the FEMA program, in part because it may be difficult to prove that someone taking advantage of the system is breaking any laws.

The city Department of Consumer Affairs is also investigating but is concentrating on the wider scams run by people who posed as FEMA employees to sell air quality products at inflated prices. That would be an illegal trade practice.