Posted March 21, 2006 – Tens of thousands of Gulf Coast residents who got federal aid checks in the wake of hurricanes Katrina and Rita didn’t deserve them, according to the Federal Emergency Management Agency, and the government wants that money back.

The agency says it already has identified 2,500 of the 50,000 people they believe got relief checks in error, and the rest should expect a letter in the mail about repaying the agency, Donna Daniels, the agency’s acting deputy director told BET.com.

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They letters read, "This correspondence serves to notify you of a debt owed to the federal government.”

Some of the letters will go to storm victims who received compensation from insurance agencies, which made them ineligible for FEMA money. Other letters will be sent to people who filed for losses on secondary residences, unaware that FEMA does not pay for damages to those homes. And an undisclosed number of letters will be mailed to people who received money they weren't entitled to because of FEMA processing errors. Letters also will go out to people suspected of fraud, Daniels told BET.com

Authorities say this kind of thing happens every time there’s a disaster, but never like this, and that’s because of the number of people affected by the disaster.
 
Rather than trying to determine if people spent FEMA money appropriately, Donna Daniels told us, the agency will focus on folks who shouldn’t have gotten it in the first place.
 
The agency says you can appeal in writing if you believe you are entitled to the assistance, but officials are urging people to make repayment arrangements even while an appeal is underway. Like the IRS, FEMA says it will start charging 2 percent interest on what it claims they owe within 30 days of the letter.

The agency says it will consider repayment plans as long as there is no indication fraud was involved. 
 
As of Monday, FEMA has paid out $6.5 billion in individual assistance to victims of hurricanes Katrina and Rita. Historically, FEMA audits find that about 2 percent to 3 percent of disaster assistance is incorrectly distributed.