FEMA to some Sandy victims: Return aid cash

TOMS RIVER, N.J. — When Catherine Tango opened the letter from the Federal Emergency Management Agency in late October, she began to panic.

Homeless after the storm flooded the Ortley Beach condominium she was renting, Tango, 61, relied on FEMA for assistance to pay her rent and living expenses at an apartment she rented in Howell. But the letter she received in late October demanded repayment of $15,500 — and threatened to garnish her monthly Social Security disability check if she doesn't pay it back.

"When I found out I could get FEMA help, it was a blessing," Tango said. "Now it's like a nightmare."

FEMA says 1,200 New Jerseyans have opened what the government refers to as a recoupment letter. The disaster-response agency is seeking $8 million in repayment from people it now says shouldn't have received that money in the first place.

Such a letter was addressed to Jill Svelling Belloff's Forked River rental home, not the lonely mailbox that fronts the empty dirt lot on Bonita Road in Waretown where her Sandy-soaked home once was, and where a new house will someday stand. FEMA couldn't have known to what degree it was piling on — the demand letter arrived just a couple of weeks before her husband underwent open-heart surgery — but they were just the same.

"I'm paying a mortgage, I'm paying rent, I'm paying storage fees, and now my husband might not be able to work — he's self employed — and we don't even have a building permit," Svelling Belloff, 54, said. "I can't even express how frustrated I am with how this has all been handled."

A FEMA spokesman told the Asbury Park Press in a statement that the agency had provided $1.4 billion in assistance to nearly 183,000 Sandy survivors. FEMA routinely audits disaster assistance payments and, as of Oct. 31, just 2 percent — about 3,600 individuals or families — of those survivors had received recoupment letters, seeking payback for a combined $23 million that FEMA says never should have been paid out.

"Unfortunately, whether through fraud, human or accounting errors, or other reasons, assistance sometimes goes to individuals who are not eligible," the statement reads.

After Hurricane Katrina, 14.5 percent of funds were "improperly disbursed," according to FEMA, which sparked an overhaul of the rules meant to protect against waste, fraud and abuse.

FEMA's governmental watchdog has been empowered by a surge in funding thanks to a Congress that puts a high priority on a slimmer national deficit and debt, said Ernie Abbott, a former top lawyer for FEMA during the Clinton administration who now represents municipalities in post-disaster negotiations with the agency.

"Frequently you will hear 'If we could only stop the waste, fraud and abuse we could be restored to an even financial keel'," Abbott said. "Well, the way you stop waste fraud and abuse is to give more money to the (U.S. Department of Homeland Security's Office of the Inspector General)."

Starting in the spring, the inspector general's office began advising FEMA to clawback millions from Shore towns that couldn't prove they had used the money in a sanctioned way or that they had simply been overpaid. FEMA, which is a part of the homeland security department, has since reversed course on at least one town.

Recipients of these letters have a few options, including paying the entire amount, setting up a payment plan, seeking a hardship reduction or disputing the debt through the appeals process. Simply ignoring the letters will result in a referral to the U.S. Department of Treasury for collection.

Sue Marticek, executive director of the Ocean County Long-Term Recovery Group, said providing FEMA with proper documentation is key for residents who have received a recoupment letter.

"You have to be able to document everything," said Marticek, whose group is an umbrella organization of about 80 nonprofits that helps to connect Sandy survivors with resources while also bridging funding gaps that have prevented many people from returning home or rebuilding. "Everything needs to be in writing."

Tango, now living in Holiday City at Silverton in Toms River, has filed an appeal and asked for a hearing with FEMA.

She is perplexed by the demand to repay $15,500, since her records indicate she received $11,799 from the agency. A paralegal who is on disability because of severe arthritis in her legs and herniated discs in her spine, Tango receives $1,154 monthly in disability payments from Social Security. She also works two days a week at the Ortley Beach A&P, earning an additional $85 per week.

FEMA's letter claims there is no proof that Tango actually lived in the Candlelight Condominiums on Route 35, even though she has a lease and rent receipts to prove it. Tango said she moved into the condominium in late August 2012, and stayed there until she left shortly before Sandy struck. The condominium building, badly flooded by Sandy, was recently demolished.

She fears that if her appeal is not successful, she will be homeless again. Currently she pays $950 a month to rent a home in Holiday City that she shares with her Maltese dog, Prince. Because her income is so low, she receives food stamp benefits and also goes to local food banks to help get enough to eat for the month.

"It's like Santa giving you gifts for Christmas, and then in February, sending you a bill," Tango said of FEMA's recoupment process.

Svelling Belloff, a self-employed artist, said FEMA told her the $1,500 per month she was paying for the three-bedroom was too much. As a result, the agency wants her to send back $2,452.

"Am I going to pay FEMA?" Svelling Belloff said. "No. I'm going to appeal. You can't ask me for something I don't have."