Crime & Justice

State officials look out for fraud and misuse of federal stimulus money

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California expects to score more than $50 billion in federal economic stimulus money. KPCC’s Brian Watt says state and local officials are on the lookout for fraud and abuse.

L.A.’s former City Controller Laura Chick is California’s new inspector general in charge of overseeing how the state spends its stimulus money. She’s joining county and federal prosecutors in the search for people who try to scam the federal government.

Bid rigging, budget padding, and kickback schemes are common when a public money pot is so big. Chick said in the aftermath of Hurricane Katrina four years ago, 17 percent of the money meant to assist victims was lost to abuse and fraud. She said the same could happen for up to 10 percent of what California gets from the American Recovery and Reinvestment Act.

In training sessions throughout the state, the inspector general and prosecutors have emphasized the importance of good record keeping. An acting U.S. attorney in the state said anyone convicted of mail or wire fraud could face up to 30 years in federal prison.