A debit to the Associated Press for not getting the joke Wednesday on a nonsensical Katrina-lawsuit number. Its straight-faced story lent credence to the idea that money-grubbing Katrina victims are seeking more than $3 quadrillion from the government. You read that right. Quadrillion.

The number is so high because one foolish plaintiff among hundreds of thousands filed a lawsuit seeking the $3 quadrillion figure, whether as a prank or protest is not clear.

And yet the AP, abandoning editorial judgment, took it seriously.

Hurricane Katrina’s victims have put a price tag on their suffering and it is staggering—including one plaintiff seeking the unlikely sum of $3 quadrillion. The total number—$3,014,170,389,176,410—is the dollar figure so far sought from some 489,000 claims filed against the federal government over damage from the failure of levees and flood walls following the Aug. 29, 2005, hurricane.

Of the total number of claims, the U.S. Army Corps of Engineers said it has received 247 for at least $1 billion apiece, including the one for $3 quadrillion.

“That’s the mother of all high numbers,” said Loren Scott, a Baton Rouge-based economist.

The “quadrillion” number is discussed in earnest, with more from economist Scott on how it’s probably a negotiating tactic.

“I understand the anger,” Scott said. “I also understand it’s a negotiating tactic: Aim high and negotiate down.”

We understand this: You’re an idiot.

The moronic discussion overshadows the story: that the U.S. Corps of Engineers says it has gotten some 489,000 claims for damages from faulty levees and flood walls—problems the Corps admits were its fault—and they are still coming in. One hundred have been filed in the past three weeks.

The city of New Orleans is seeking $77 billion. Funny? Not if you’ve seen the place. There are also fourteen wrongful death claims.

Focusing on the outlandish number, even though the AP admits that it’s “unlikely,” reinforces a couple of stereotypes that the insurance industry has an interest in perpetuating. One is that the legal system is out of control. The second is that policyholders and other Katrina victims are hustlers.

We expect more common sense from the AP

Gretchen Morgenson and The New York Times again lead the way on the subprime scandal, this time with ominous news that subprime leader Countrywide may have forged documents to support illegitimate charges to borrowers.

Morgenson has been all over Countrywide’s abuse of the trust-based bankruptcy system, where it has adled on fees and charges that already-strapped borrowers do not owe.

Back in November, Morgenson reported that a U.S. bankruptcy trustee in Pittsburgh asked for sanctions after Countrywide either lost or destroyed $500,000 in checks from borrowers—then charged them late fees and legal costs because of Countrywide’s own screw-ups or deliberate wrongdoing.

The latest revelations are potentially even more serious. The forged documents emerged from a case in Pennsylvania in which a homeowner had filed for bankruptcy back in 2001 but kept current on her obligations until the case was discharged last March.

A month later, however, Countrywide sent her a notice of default, saying she owed “monthly” late (and other) charges totaling, eventually, $4,700.

When the borrower’s lawyer complained, Countrywide produced three letters dated 2003, 2004 and 2007 addressed to the borrower and bankruptcy trustee.

Nobody had received the letters because they were never sent. A Countrywide lawyer later explained that they had been “recreated” after the fact. He said it was a mistake caused by “a processor.” Sure. Federal bankruptcy judge Thomas P. Agresti isn’t fooled.

“These letters are a smoking gun that something is not right in Denmark,” Judge Agresti said in a Dec. 20 hearing in Pittsburgh.

The Wall Street Journal this morning pays Morgenson the compliment of following her story with one (link for non-subscribers) on Countrywide’s bankruptcy abuses in Miami and Houston. Here’s a bankruptcy judge in Houston who is considering sanctions:

“How many times do I have to listen to that before I conclude, ‘You know, there’s got to be some kind of reckoning’ when I keep hearing time after time, ‘we made a mistake, we made a mistake, we made a mistake, we made a mistake?’”

Anna Bahney is a Fellow and staff writer for The Audit