Recipients of Winfrey charity charged with fraud

HOUSTON (Reuters) - Three women displaced by Hurricane Katrina have been charged with fraudulently collecting U.S. housing aid after television star Oprah Winfrey helped them buy new homes, the government said on Wednesday.

The victims of the deadly 2005 storm obtained rental assistance from the Federal Emergency Management Agency after having purchased new, fully furnished homes that were partly financed by Winfrey's charity, Oprah's Angel Network, according to U.S. Attorney Tim Johnson.

"The response to natural disasters brings out the best and worst in people," Johnson said in a statement. "Generous acts of charity are tarnished by those who, despite the generosity of others, fraudulently make claims for government relief funds."

A spokeswoman for the Oprah's Angel Network, Angela DePaul, said the group was disappointed to learn of the grand jury indictments released Wednesday.

"But we remain proud of and committed to the hundreds of families we have been able to help," DePaul said.

One of the women charged, Kiesha Murphy, received more than $17,000 in legitimate disaster aid from FEMA, but continued to draw federal funds even after moving into a charity-financed home in July 2006, Johnson's office said.

Winfrey's group gave funds to Habitat for Humanity -- a charity that builds homes for low-income families -- to construct and furnish new homes and provide interest-free loans to families displaced when Hurricane Katrina flooded 80 percent of New Orleans and killed 1,500 people in August 2005.

Winfrey's charity built and furnished homes for about 65 families that relocated to Houston after hurricanes Katrina and Rita in 2005.

(Reporting by Chris Baltimore; Editing by Doina Chiacu)