Thousands of BP Claims Are Fraudulent, Says Claims Facility

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Last April, the BP oil spill dumped thousands of gallons of oil into the Gulf of Mexico, destroying the local ecosystem and crippling the local economy. In August, the Gulf Coast Claims Facility was conceived to help process claims from spill victims and disburse the $20 billion fund created by BP. And in the past five months, more than 481,000 claims were filed by people who said they were negatively impacted by the spill. But according to attorney Kenneth Feinberg, who heads up the facility, more than 7,000 of those claims are believed to be fraudulent.

On Thursday he testified in Washington before a Senate subcommittee on Homeland Security and Governmental Affairs, saying that 7,575 claims have been referred to the Justice Department for criminal investigation. And 8 have already been indicted. But that's not the only problem ...

At the same time, Feinberg and the fund were criticized for lack of transparency — and the slow progress Feinberg is making in disbursing funds to victims. Republican senator Richard Shelby of Alabama said around 57 percent of the claimants from his state — more than 38,000 — had yet to see a cent.

Democratic senator Mary Landrieu of Louisiana was also critical. "The system is not yet working, in my view, as well as it should be," she said.

Potential Scams top 7,000 in BP Spill Compensation [AP]
Feinberg pummeled with complaints by Landrieu and Vitter [Fox]