The U.S. Small Business Administration is warning Americans applying for disaster assistance in the aftermath of Hurricanes Katrina and Rita to be on the watch for scam artists posing as federal officials offering help, while trying to take advantage of those in the midst of rebuilding their lives.

SBA Administrator Hector V. Barreto says, "The SBA will not tolerate the defrauding of those who have already lost so much in the aftermath of these devastating storms. Those who are found taking advantage of the disadvantaged will be prosecuted to the fullest extent that the law provides."

The federal government has set up a "Hurricane Relief Fraud Hotline." Residents and business owners who have knowledge of fraud can call 1-866-720-5721, send a fax to 1-703-604-8567, or email the hotline at katrinafraud@dodig.mil . Those without internet access can write to: Hurricane Relief Hotline, Washington, D.C. 20301-1900.

Disaster survivors have reported receiving calls from individuals claiming to represent SBA, asking for upfront payments of as much as $3,000 to be considered for a disaster loan. Others are also using newspaper ads promoting help with disaster loan applications for "a small processing fee" of up to $250. In Mississippi, residents and business owners have reported seeing roadside signs advertising help with disaster loan applications for a fee.