Spoiler room

Donovon McMullen Jr. sat in his car in the parking lot of a Texaco station in Natchitoches. He had a shotgun loaded with buckshot, a Star 9mm pistol stuffed inside a box and a magazine full of Hydroshock ammunition. When Michael Proveaux pulled up beside him, McMullen, the 41-year-old chief of the Caddo Parish District 3 Fire Department, told Proveaux to follow him.

McMullen lead Proveaux, an ambulance company supervisor, down a dirt road deep into the woods. According to court records and a federal prosecutor, they spent two hours discussing their plan to murder Rudy Adams, a one-time ambulance driver from Beaumont, Texas.

Adams was cooperating with the FBI in an investigation into the theft of a half-million dollars worth of medical equipment from a federally funded Hurricane Katrina disaster relief staging area in Baton Rouge. McMullen, Proveaux and Adams had pulled off the heist together.

As they talked in the woods outside Natchitoches, McMullen handed Proveaux the box containing the pistol and ammunition. He also handed over a disposable cell phone. McMullen was worried the government was tapping his home telephone. He told Proveaux that if the FBI ever came after him he could take out two agents at a time with his shotgun.

The pistol’s Hydroshock bullets would explode on impact, McMullen said. He also stressed to Proveaux how important it was their hired hitman kill Adams as soon as possible.

“I told you a good long way back about needing to take care of (Adams) and we didn’t do it,” McMullen said. “If we would’ve taken this mother—— out, we would’ve heard nothing.”

Five days later, on March 21, 2007, Proveaux called McMullen and told him Adams was dead.

“My problems are solved,” McMullen said. “I’m going to have a cold beer.”

But McMullen’s problems were only just beginning, and he would become one of hundreds of people prosecuted for trying to enrich themselves with Katrina aid. (Read more about the McMullen case on page 22.)

Katrina was still churning in the Gulf when hurricane relief scams started popping up, from boiler rooms to living rooms.

Among the more dubious was Gary S. Kraser of Florida, who on Aug. 30 created a Web site called AirKatrina.com, where he claimed to be a private pilot flying relief supplies to New Orleans. His pitch included this heart-wrenching description of what he’d seen on his first flight in:

“I am shaking as I write this … I saw people on their roofs that had used axes to cut through the roof, waving at us as though we were Air Rescue. I saw dogs wrapped in electrical lines, still alive and sparks flying from their bodies, being electrocuted, as well as some people dead already. I will hear these screams for the rest of my life.”

He sucked in $40,000 without ever leaving Florida.

Scams like Kraser’s popped up all over, prompting then-Attorney General Alberto Gonzales to announce the Hurricane Katrina Fraud Task Force before the floodwater had even receded.

David Dugas, the U.S. Attorney for Baton Rouge, was put in charge of the new federal fraud crackdown, which involved 30 agencies.

“The question was, how do you coordinate all that,” Dugas says. “It wasn’t going to be a tip-driven investigation. It was going to be a thousand tip-driven investigations.”

So the task force built a database “from the ground up,” Dugas says. It opened a call center on the second floor of Johnston Hall at LSU, staffing it with student workers carefully screened by the FBI.

Each phoned complaint went into the database for review, with the most promising tips getting routed to various federal agencies involved in relief. In many cases thieves submitted multiple applications for relief.

“Our experience is that the real criminals who are committing disaster fraud don’t just limit themselves to one program,” Dugas says.

From its command center beside Tiger Stadium, the Hurricane Katrina Fraud Task Force has referred more than 14,500 leads to law enforcement agencies around the country, about 200 a week.

In September 2005, 34-year-old Tina Marie Winston filed an online application for disaster assistance with FEMA. Winston said she was a New Orleans resident who had lost her home, her job and her two daughters, ages 5 and 6, to Hurricane Katrina. She claimed to have witnessed the bodies of her two girls wash away in the flood.

But Winston didn’t live in New Orleans. She lived in Belleville, Ill.

“All of it was a lie,” Dugas says.

In Bakersfield, Calif., the American Red Cross set up a national call center to take telephone applications for disaster relief. Some operators realized how easy it was to get cash from the Red Cross, so they started calling in their own bogus applications. The Katrina Fraud Task Force helped the Justice Department indict 72 people connected to that scam.

The Hurricane Katrina Fraud Task Force has been so successful the U.S. Department of Justice is using it as a model for other disaster fraud task forces throughout the country. Dugas and his staff are assisting investigators and prosecutors in California dealing with fraud following last year’s wildfires.

“This is the first time we’ve attacked disaster fraud this systematically,” Dugas says.

In November, a federal judge sentenced McMullen to 14 years in federal prison.

Kraser, the lying Florida pilot, was sentenced to 21 months in prison.

And Winston drew a 48-month sentence.

Next time the sentences will be even tougher.

In December, Congress passed a new law that makes any kind of disaster relief fraud a 30-year felony. Congress also passed a sentence enhancement for other federal crimes, such as mail and wire fraud that are committed as part of a disaster-relief scam.

Dugas, whom President Bush has nominated for U.S. district judge, helped the U.S. Sentencing Commission establish the punishment guidelines for the new laws.

“Congress doesn’t think probation is enough for disaster-relief fraud,” Dugas says. “For future disasters the sentences will be higher.”

Dugas says Katrina fraud investigations and prosecutions will continue for some time. The big money cases are still to come. “We think it’s going to be a five- to eight-year cycle.”

Click here to read Chuck Hustmyre’s sidebar to this story, Anatomy of a Heist.