After Superstorm Sandy hit the East Coast nearly two years ago, the federal government quickly sent out $1.4 billion in emergency disaster aid to the hurricane's victims. Now, thousands of people might have to pay back their share. The Federal Emergency Management Agency is scrutinizing about 4,500 households that it suspects received improper payments after the storm, according to program officials and data obtained by the AP through a public records request. As of early this month, FEMA had asked around 850 of those households to return a collective $5.8 million; the other cases were still under review. FEMA's campaign to recover overpayments typically involves inadvertent violations of eligibility rules, bureaucratic mistakes, or missing documentation rather than outright fraud.
Many people asked to return money were deemed ineligible because their damaged properties were vacation houses or rental properties, not their primary residences. Others had double-dipped into the aid pool, with more than one household member getting payments. Some received FEMA money for things later covered by insurance. As of July 30, the average demanded refund was $6,987, a sum that could be difficult for many, given the modest annual incomes of most aid applicants. Roughly half of 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," says the director of the New York Legal Assistance Group's Storm Response Unit, which has been helping about a dozen families fight a FEMA clawback. (Read more Hurricane Sandy stories.)