Thousands of people given assistance after Hurricane Katrina are now finding out that the federal government is taking some of that money back.
Rae Stampley is one of the people who survived Hurricane Katrina in 2005, but now owes money.
“We lost everything in the house. We got about 3 feet of water,” Stampley told Channel 2’s Wendy Corona.
Money from the Federal Emergency Management Agency helped him start over in Atlanta.
“They gave everyone $2,000 who applied and qualified,” he said.
Stampley received $4,400 more through an appeal.
A letter dated February 2013 was his first sign that the government wanted its money back.
“Never in a million years did I think that they’d come back after me because I knew that I was doing everything by the book,” he said.
Stampley said his tax return of about $5,000 was withheld to pay his debt. According to the FEMA website, it can even be taken back with interest.
Corona learned that Stampley is not alone. A young lady who spoke on condition of anonymity also had her tax return of $1,500 withheld and that was just the start.
“Roughly a month later, we got a letter that they were going to start garnishing my wages and they want repayment of $14,000,” she said.
About a year after Katrina, she received $10,000 in assistance. The difference?
“We believe it’s from interest but nobody from FEMA has been able to tell me why and I call consistently and I get no one,” she said.
A FEMA spokesman would not go on camera but said the recoupment could be due to a duplication of benefits or simply a mistake, possibly overpayment. FEMA asks those people affected to be in touch with the agency and file an appeal if need be.
“The language in the letters doesn’t state that this is a loan,” stated the young woman.
“To be honest,” said Stampley, “I don’t think I owe anything.”
FEMA did mention that when recoupment is due, it leaves the agency’s hands and goes under the Department of the Treasury and eventually to a collection agency.