Gulf residents and businesses need to be ready to document their losses and expect a fair amount of scrutiny if they plan to seek compensation from British Petroleum’s $20 billion compensation fund, says Houston criminal defense attorney Dan Cogdell, who represented people accused of defrauding FEMA after the 2005 Gulf Coast hurricanes. The way prosecutors vigorously pursued those storm cases provides a blueprint for what could happen next, Cogdell says.

“Federal prosecutors filed charges over even a few thousand dollars thought to have been grabbed improperly,” says Cogdell of Cogdell & Ardoin. “Victims who feel massively wronged by what happened need to be careful to document everything in support of their claims, and not let the injustice of the situation lead them to bend rules and potentially wind up facing criminal charges.”

That kind of scrutiny may be difficult on those seeking quick compensation for valid claims, but it’s probably not unjustified, say experts. Even Kenneth R. Feinberg, who was appointed by President Obama to administer the fund, acknowledged that fraud is always a concern.

According to a report in the New York Times,

Nothing can undercut the credibility of a program more than the perception that you’re paying fraudulent claims,’ said Mr. Feinberg, who administered the settlement for victims of the 9/11 attacks and has done similar work for people affected by Hurricane Katrina, the defoliant Agent Orange and the 2007 killings at Virginia Tech University.

The key to fighting fraud, he said, is corroboration of large claims. Of the 7,300 claims processed in the $7 billion 9/11 fund, he said, his team determined that 35 were fraudulent. ‘Some people went to jail, others paid a fine,’ he said.

Emergency claims, which tend to be smaller, will not get that kind of scrutiny, he said. ‘You’ve got to get these payments out quicker, so people can stay in business and pay the light bill and put food on the table.

If history is precedent, though, some fraudulent claims are bound to get through. According to a 2006 report in USA Today, FEMA paid out at least $1 billion in fraudulent claims after Hurricanes Katrina and Rita. Among the Hall of Shame:

• FEMA sent $2,358 to someone who claimed a damaged house in a New Orleans cemetery.

• Another $4,358 went to a Mississippi prisoner who gave officials his correct mailing address — at the prison where he'd been locked up since 2004.

• The agency paid $8,000 for someone to stay in a California hotel for five months, all while paying $6,700 in rental assistance for the same period.