Disaster Fraud

Disaster fraud is a fraud whose occasion is a natural disaster, a declared emergency or the relief effort that follows one. It covers several unrelated schemes that share a moment rather than a method: impersonating a federal disaster official, taking payment for repairs that are never made or never finished, and filing for disaster assistance in someone else's name or on false facts.

It is not merely a descriptive label. 18 U.S.C. 1040, headed "Fraud in connection with major disaster or emergency benefits," makes it a federal crime to knowingly falsify, conceal or cover up a material fact by any trick, scheme or device, or to make a materially false statement or use a false document, in connection with a benefit authorized, transported, transmitted, transferred, disbursed or paid in connection with a major disaster declaration under section 401 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act, an emergency declaration under section 501 of the same Act, or the procurement of property or services related to such a declaration as a prime contractor with the United States, or as a subcontractor or supplier on a contract with a federal prime contract behind it. The penalty is a fine, imprisonment for up to 30 years, or both, and the statute defines "benefit" broadly as "any record, voucher, payment, money or thing of value, good, service, right, or privilege provided by the United States, a State or local government, or other entity."

Separately, 18 U.S.C. 1343 raises the ceiling on wire fraud, from 20 years to 30 years and a fine of up to $1,000,000, where the violation occurs "in relation to, or involving any benefit … paid in connection with, a presidentially declared major disaster or emergency." Our page on wire fraud covers that offense in general; what matters here is that the disaster context is written into the sentencing rather than treated as an aggravating fact a court might notice.

One boundary is worth drawing at the front, because intuition puts it in the wrong place. A fraudulent appeal for donations to help disaster victims is a charity scam, not disaster fraud. The FBI's own crime-type definition for charity offenses expressly reaches deception aimed at people who believe they are donating to "charities representing victims of natural disasters shortly after the incident occurs." Disaster fraud, on this page, is about money extracted from the survivor and from the relief system, not solicited from the public.

Impersonating a federal disaster official. The Federal Trade Commission's guidance is specific enough to be used as a test. It states that FEMA does not charge people for disaster assistance, and that "FEMA employees will never ask for money for inspections, disaster assistance, debris removal, grants, help with applications, or appeals," adding that "FEMA inspectors will not ask for your banking information" and that "anyone who says they work for FEMA but asks for money or financial information is a scammer." On identification, the FTC states that "FEMA staff and their contractors always wear an official badge with their name and photo on it," while noting that badges and branded clothing are themselves forged. And on unexpected contact, its position is narrow and therefore usable: "FEMA only contacts people who've contacted them or applied for FEMA disaster assistance."

That last sentence is worth reading precisely. It is not a claim that a government agency never telephones anyone, which our page on the government impersonation scam shows to be false. It is a claim about one agency's own practice in one context, and it means an unexpected approach from "FEMA" to someone who has never applied is anomalous on the agency's own account of how it works. The legal architecture of impersonating a federal agency, which is unlawful in itself, is on that page.

Contractor and home repair fraud, which does the most financial damage. The FTC lists eight signs of a post-disaster repair scam: the contractor claims they do not need to be licensed for the work; offers a discount conditional on signing a contract immediately; tells you to sign over your insurance check; asks you to pay for everything up front; insists on payment "by wire transfer, gift card, payment app, cryptocurrency or in cash"; asks you to sign a blank contract; suggests borrowing from a lender they know; or claims they can help you qualify for FEMA relief for a fee.

The insurance-check item is the one to isolate, because it is the step that transfers control of the whole claim in a single signature. The FTC's advice is not simply to refuse: it is to "arrange with your bank or credit union for a Certificate of Completion. That way, the bank will pay the contractor for each stage of the job after you have given your approval." That converts one irreversible act into a series of reversible ones, which is the entire protective mechanism and works whether or not the contractor turns out to be dishonest.

The rest of the FTC's guidance is procedural and cheap: confirm the license with the state or county government and ask for proof of insurance; get more than one written estimate describing the work, materials, completion date and price; get a written contract with no blank spaces; negotiate a down payment and note that some states cap what a contractor may take as one; pay by credit card or check rather than by any irreversible method; and make no final payment until the work is finished. It also notes that a contract signed in the home, or anywhere other than the seller's permanent place of business, comes with a written statement of a right to cancel within three business days.

Fraudulent applications, including in someone else's name. This is the limb 18 U.S.C. 1040 was actually written for: a false statement made to obtain a disaster benefit. It reaches an applicant overstating a loss, and it reaches a stranger filing in a survivor's name using stolen personal information, which is simultaneously identity theft and is covered on our page of that name. The practical harm to a survivor is distinctive: the fraudulent claim can consume the assistance the survivor was entitled to, so the loss shows up as a denial rather than as a missing payment.

What changed in 2026, and why old advice needs checking. For two decades the Justice Department ran a National Center for Disaster Fraud, established in the autumn of 2005 after Hurricane Katrina, which took disaster fraud complaints centrally and referred them out. The Department announced its closure effective March 31, 2026, stating that after a 2023 program review the Criminal Division had determined the center's intake function "was no longer the most effective avenue for pursuing disaster fraud," in part because "many of the NCDF's original agency partners now operate their own dedicated hotlines." Its guidance now is that "victims of disaster fraud should report their complaints to the appropriate law enforcement agency based on the type of fraud." Material published before that date, including printed matter still in circulation after disasters, points at a hotline that no longer takes complaints. Our page on fraud sets out the reporting routes that are current.

Three schemes run in parallel after a declared disaster, and they reach a survivor at different moments:

1. Immediately, the impersonator, presenting as a federal official or inspector, seeking a fee, banking details or identifying information.

2. Within days, the contractor, offering fast repairs, wanting cash up front or the insurance check signed over, and applying a deadline to the offer.

3. Over weeks, the application fraud, either exaggerated claims or claims filed in a survivor's name with stolen information.

A hypothetical example with invented figures. Marcus's insurer settles his storm damage claim at $28,000. A contractor who knocked on his door offers to begin the next morning if Marcus pays the full amount up front, and suggests simply signing the insurance check over to save a trip to the bank.

Suppose he does, and the contractor completes roughly $6,000 of work before disappearing. Marcus's exposure is $28,000 minus $6,000, or $22,000, and he has nothing left to withhold, because the money is gone and the claim is settled.

Now run it the way the FTC describes. Marcus negotiates a down payment, arranges a Certificate of Completion with his bank so the contractor is paid at each stage after Marcus approves it, and makes no final payment until the work is finished. The same abandonment after $6,000 of work costs him a single stage payment rather than the whole settlement, and the remaining funds are still available to hire someone else. Nothing in that sequence required him to identify a scammer; it only required the payments to arrive after the work.

Disaster fraud has no upside, so what follows is what protects a survivor and what the protections do not reach.

What genuinely protects

• Knowing that disaster assistance carries no fee, which disqualifies an entire class of approach on one fact.
• Staged payment through the bank rather than a signed-over insurance check, which limits the loss from any single bad contractor to one stage.
• Confirming a license with the state or county and asking for proof of insurance, both of which are free and take minutes.
• A written contract with no blank spaces, more than one written estimate, and no final payment until the work is done.
• Treating an unexpected approach from an agency you have never contacted as anomalous, which the FTC's own description of FEMA's practice supports.

What the protections do not reach

• Payments already made by wire, gift card, payment app, cryptocurrency or cash, which have no reversal mechanism.
• A settled insurance claim. Once the proceeds are paid out and spent, the insurer's obligation is generally discharged whatever happened next.
• An application fraudulently filed in your name, which you may learn about only when your own claim is denied.
• The timing itself. These schemes work because they arrive while a household is displaced, under-slept and dealing with an insurer, which is the one condition no rule can remove.