"We have already opened several cases," FBI Assistant Director Chris Swecker told United Press International, "I can't say how many at this stage." He declined to give any further details.

Late Wednesday, a press release from the Justice Department announced the first prosecution in connection with alleged abuse of federal Katrina funds.

Nakia Dewuane Grimes, 30, of Atlanta, Ga., is charged with making a false claim to the Federal Emergency Management Agency over the internet for $2,000 of hurricane Katrina relief cash by claiming to be a New Orleans evacuee.

FBI Director Robert Mueller III told reporters earlier Wednesday that the bureau set up a telephone hotline last Friday "to collect information and complaints on government fraud and public corruption" related to Katrina funds and that it had already received 180 calls.

But Swecker was keen to stress that, "We don't open a case based on (an) anonymous tip," explaining that the bureau would first make preliminary inquiries to see whether there was "sufficient indication of criminal activity" - a process known as "predication."

The Justice Department statement said Grimes was arrested at an Atlanta post office, where she was lured to sign for and collect her $2,000 hurricane relief check.

The case involved federal investigators from the FBI, the U.S. Postal Service, and the Department of Homeland Security inspector general's office, the statement said. It was the first fruit of a Justice Department task force set up to "to deter, investigate and prosecute disaster-related federal crimes" and chaired by Assistant Attorney General Alice Fisher.

The task force is part of a massive effort by federal agencies to prevent the misuse or misappropriation of recovery and reconstruction funds, as up to $2 billion a day is being spent - most of it by the Federal Emergency Management Agency, known as FEMA, part of the Department of Homeland Security.

The department's inspector general, Richard Skinner, announced Monday that he was setting up a special Office for hurricane Katrina oversight, to monitor the huge expenditure.

He said that Matthew Jadacki, who had worked in the office of the FEMA inspector general and later became the agency's chief financial officer, would be detailed from his current post at the National Weather Service to get the office up and running.

Jadacki will start work part time next week and would transition fully to the new post "hopefully within a week or two," Skinner said.

He has "extensive experience" of both the audit, inspections and investigations work of inspectors general; and of FEMA's disaster relief work, Skinner said of Jadacki. "I thought it was the perfect marriage."

Skinner said that - though work was already underway by a special Katrina team - it would take "at least 90-120 days" to finish the stand-up of the office.

He said he had chosen Jadacki because he "at the rate the money is going out the door, we just can't afford" to take the time a full recruitment process would demand.

"I know he can walk in the door and start right away," Skinner said of Jadacki, adding that one of the latter's tasks would be to hire a permanent chief for the office, which he expected to last as long as the federal relief program - perhaps up to seven years.

"We will have a very robust investigative program," he said, to deal with any tips or allegations of mismanagement or fraud the new office receives.

Skinner added that he had this week deployed teams of auditors to Louisiana and the other affected states to work with authorities there on monitoring the disbursement of funds.

"We will be working very, very closely with state and local auditors," said Skinner, adding that typically between two-thirds and three-quarters of post-disaster monies are disbursed out by state and local authorities.

"The most expensive aspect of any disaster is the reconstruction and re-building," he said. "The bulk of that will go through state and local authorities," to pay for repairs to public buildings, highways, bridges, dams and other infrastructure.

Skinner said that one priority of his was to get involved in the processes of application for and disbursement of funds "on the front end. That way we will have less problems down the road."

He said that his staff would be attending "applicant briefings" for local officials and contractors who will be using federal reconstruction funds, outlining the requirements for documentation and transparency, "to advise them what can get them in trouble."

"Once the money's out the door it's very hard to get back," he said. "The whole focus is on prevention."

Swecker echoed that sentiment. "We'd like to be in a preventative mode," he said, adding that FBI agents would be "working closely" with Skinner's auditors from the Department of Homeland Security and expected to receive referrals from them where there was evidence of criminal activity.

At the same time, he said, it would be a two-way relationship - the FBI would refer tips to the auditors where agents decided there was insufficient basis for a criminal case.

"You're going to see real close collaboration on any type of procurement fraud and procurement irregularities," he told UPI. "And frankly I don't mind the public knowing that because it's good to get the word out that it's being closely watched."

Swecker said the tips from the hotline were being routed to field offices in the region, depending on where the alleged fraud was taking place.

He said most of the allegations related to New Orleans, but added "I'm not sure if that is because we have publicized it more effectively through the local press there."

The FBI field office in New Orleans has the second largest public corruption portfolio - in terms of numbers of agents and cases -- of any in the country, behind Chicago.

Mueller said the bureau's building in the city survived the hurricane and flooding - but only just. He said that the roof was damaged and the top two floors virtually destroyed. "We will have to rebuild," he told reporters.

The 300-plus employees had also survived, he said, adding that the bureau's records, case files and evidence store were all intact.

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