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BP oil spill fund finds fraud among applicants

The oil spill at Deepwater Horizon in April 2010 not only caused the largest off-shore oil spill in U.S. history, it also caused more than 1 million claims to be filed at the Gulf Coast Claims Facility. This organization oversaw the distribution of the $20-billion public compensation program created by British Petroleum, the company found responsible for the oil spill.

As noted by the administrator of the GCCF, fraudulent claims were an inevitable part of the program. Since the fund was established in August 2010, several people have been accused of fraud charges that have allegedly victimized many people in the Gulf Coast states, including Louisiana.

In one criminal case, two people were convicted of stealing the identities of hundreds of people, some of whom were living in Louisiana. The couple allegedly used those names to file fraudulent claims suggesting that those people had lost wages due to the oil spill worth millions of dollars. The couple reportedly collected approximately $700,000 from the program and will be sentenced later this month.

The 1.1 million claims received by the GCCF came from all over the country and even from other countries. Of those claims, facilitators found that roughly 18,000 claims were fraudulent-4,000 of those were given to the U.S. Justice Department for further investigation.

In the end, the fund approved 226,000 claimants and paid approximately $6.5 billion. Many of the applications were not approved because they did not provide valid documentation proving that economic hardship had been caused by the oil spill.

Other alleged acts of fraud included a 31-year-old man that filed as many as 700 suspicious claims, according to authorities. Most of them were for low-income workers that were either Hispanic or Haitian and the man charged each applicant a processing fee of $300. According to prosecutors, the man managed to see $3 million of the fund fraudulently awarded to himself and his applicants.

Source: Miami Herald, "Fraud pollutes BP oil-spill compensation fund for Gulf Coast victims from Florida to Louisiana," Jay Weaver, Aug. 19, 2012

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