Thousands of Superstorm Sandy victims could be asked to return FEMA funds

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The Federal Emergency Management Agency (FEMA) has asked hundreds of victims of 2012's Superstorm Sandy to return nearly $6 million paid as compensation, and thousands more could be asked to do the same.

The Associated Press reports that as of early September, FEMA had asked around 850 aid recipients to return a collective $5.8 million. Approximately 3,600 other cases were still under review.


FEMA's campaign to recover overpayments, called "recoupment" in agency lingo, 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.
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