Bill aims to keep FEMA from collecting Sandy overpayments due to error

Touro Law Center Disaster Relief Clinic Staff Attorney Dan Strafer along with summer students Anthony Dichiara, Jeremy Saint Laurent and Steve Spaccarelli

Touro Law Center Disaster Relief Clinic Staff Attorney Dan Strafer along with summer students Anthony Dichiara, Jeremy Saint Laurent and Steve Spaccarelli

The Touro Law Disaster Relief Clinic recently paired-up with Congresswoman Rice and Congressman Meeks to help immunize innocent homeowners from FEMA’s attempts to collect Super Storm Sandy insurance over-payments.

Anthony Dichiara, a Touro Fellow at the Disaster Clinic, along with Staff Attorney Dan Strafer and summer students Jeremy Saint Laurent and Steve Spaccarelli  recently attended a press conference held at the home of Elizabeth Treston, a Long Beach resident who FEMA has attempted to collect $4,500 for over-payments made to her over two years ago.  Ms. Treston neither committed fraud nor misrepresented the basis of her insurance claims in order to obtain these proceeds.  Instead, FEMA awarded her excess funds without indicating how the money was to be used or whether these funds were potentially duplicative of other proceeds.

Ms. Treston, however, is not alone as FEMA has began contacting over 1,000 residents in Long Beach, Freeport, and Oceanside in order to collect similar over-payment amounts.  As a result, Representatives Rice and Meeks have put legislation in place that would allow FEMA to forgive the debts of innocent homeowners while keeping fraudulent homeowners on the hook.  This legislation will hopefully be enacted to ease some of the burdens faced by many still in the recovery process.

Summer Fellow Steve Spaccarelli describes his experience during the press conference as an enlightening one. “I enjoyed having the opportunity to meet Congresswoman Rice along with having the opportunity to hear what the policy regarding recoupments was going to involve”. The burning question I was left with after the press conference is about what FEMA will do in response to the passage of this bill. Even though FEMA will probably begin using discretion again based on individual cases when determining whether or not people need to pay back FEMA for aid, there’s still the possibility that FEMA still charges people indiscriminately on the recoupments which will leave Sandy victims in a rather curious situation. We’ll see what happens as the bill gains more traction in Congress.

Summer Fellow Jeremy Saint Laurent describes the proposed bill drafted by Congresswoman Kathleen Rice and Congressman Gregory Meeks as “exactly what the thousands of Long Island residents effected by Hurricane Sandy have been waiting for”. Long Island home owners were some of the hardest hit in the state and the recoupment letters they received from FEMA, asking for money they spent to repair their homes in good faith, was simply adding insult to injury.

Once the bill is approved, FEMA will have the authority to overlook certain duplicated benefits, allowing those home owners who innocently received and spent money from FEMA to move on with their lives some two and a half years after the super-storm devastated the Island. FEMA will be given discretion as to which debts they will be forgiving, allowing them to pursue the few cases that entail deliberate fraud on the part of home owners.

It is evident that the press conferences and the announcement of the bill serves as a moral boost to the victims of Sandy but hopefully it will also mend the relationship between homeowners, the national government and FEMA.  This bill is a step in the right direction to restore the much needed trust between those who felt they were short changed and wrongfully accused by FEMA and the government workers in charge of allocating funds post-natural disaster.

Written by Anthony Dichiara, Jeremy Saint Laurent and Steve Spaccarelli 

See below for the formal Newsday article and Video.

Newsday: Bill aims to keep FEMA from collecting Sandy overpayments due to error, By Emily C. Dooley

National and local politicians want to stop Federal Emergency Management Agency officials from demanding residents pay back $23.4 million in financial assistance awarded to superstorm Sandy victims.

During a news conference in Long Beach on Friday, Rep. Gregory Meeks (D-St. Albans), Rep. Kathleen Rice (D-Garden City), local politicians and residents whom FEMA wants to claw back money from pressured Congress to pass a bill that would waive the debt when payments were made by error or mistake. It would not apply to fraud cases. A similar bill expired in 2010.

“These are hardworking individuals who committed no crime, no fraud,” Meeks said. “Our natural disaster response must be more sensitive to victims’ concerns.”

The bill passed committee, but has not been called for a House vote.

FEMA sent demand letters to 5,350 applicants in New York and New Jersey who the agency believes were either overpaid or improperly paid from $26.99 to $31,900 per case.

Nearly 1,000 demand letters have been sent to Long Islanders, amounting to $6.79 million, according to documents obtained by Newsday through the Freedom of Information Act.

Meeks also said House and Senate lawmakers from both parties would send a letter to FEMA next week asking the agency to stop collection efforts until the bill passes.

“They’re victims, and they’re being victimized again,” Rice said.

FEMA’s Director of Public Affairs Rafael Lemaitre said the agency didn’t comment on pending legislation or correspondence, but the amount it wanted to claw back represents less than 2 percent of the overall aid awarded to individuals.

“We know that for that relatively small percentage of individuals it can be very difficult, and FEMA is committed to maintaining a fair and transparent process for recovering improper payments,” he said in a statement. He said people have options: pay, appeal, request a compromise or start a payment plan.

Once recipients receive a demand letter, they have 30 days to pay or risk interest charges. Appeals must be filed within 60 days. Penalties begin to accrue at 90 days; 120 days after the initial letter is sent, FEMA turns the account over to the Treasury Department, which can garnish wages, tax returns and other benefits to recoup the debt.

Advocates say the process is hard to understand, appeals are difficult, and penalties are severe.

Cedarhurst resident Alan Oberstein said he got a letter from FEMA in April demanding about $2,900. A week later, a letter from Treasury said he owed $800 more in penalties and fees. “I don’t know what fees,” he said. “It’s not like a bank. It was very vague.”

Oberstein, whose house was flooded with 10 feet of water, asked Rice’s office for help. The case is still unresolved.

Treasury officials would not disclose recoupment fees.

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