Legal
AECOM to Pay $11.8M to Settle Hurricane Katrina False Claims Case
A boat left on the Xavier University of Louisiana campus following flooding from Hurricane Katrina in 2005.
Photo by Bart Everson/CC BY 2.0 Deed
AECOM has agreed to pay $11.8 million to resolve allegations that it knowingly submitted false claims to the Federal Emergency Management Agency on behalf of schools while working on Hurricane Katrina recovery in New Orleans, the U.S. Dept. of Justice announced Oct. 24. A whistleblower working for AECOM originated the case, court records show.
FEMA hired AECOM as a technical assistance contractor supporting its disaster recovery efforts following the 2005 hurricane, according to Justice Dept. officials. In the role, Firm employees prepared project worksheets on behalf of institutional applicants whose structures were damaged by the storm. These included descriptions of damage, scopes of work and cost estimates to repair or replace structures. FEMA used the worksheets to determine the amount of public assistance funding it would supply to the applicants.
Officials allege that one AECOM project officer on the Katrina recovery effort between 2006 and 2010 wrote fraudulent worksheets for some applicants. In one case for Xavier University of Louisiana, he wrote that a student center had a finished basement, when it actually did not. The false information led FEMA to pay applicants more than what its rules actually permitted, said Justice. That money went to the applicants, and not AECOM.
AECOM supervisors reviewed the applications, but did not correct them, Justice officials said.
The settlement agreement resolves the government’s allegations against AECOM, but the document notes it is not an admission of liability. AECOM continues to deny the allegations.
"AECOM expressly denies any liability or wrongdoing relating to our work in New Orleans following Hurricane Katrina," the company said in a statement. "The disputed funds in this case were all allocated for rebuilding New Orleans schools and no funds in question were directed to AECOM. We continue to disagree with any assertion by any government agency that the schools received too much money to rebuild."
The company added that it "agreed to pay the government a small fraction of the damages it sought" in order to "avoid the expense and distraction of litigation related to events that occurred more than 15 years ago."
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Of the $11.8-million settlement, $5.9 million is restitution and interest, according to the agreement. Robert Romero, the whistleblower who originally filed the False Claims Act complaint, will receive $2.4 million, officials said.
Xavier University and the Roman Catholic Archdiocese of New Orleans have also settled with the government over their alleged roles in false submissions to FEMA. Justice officials say the U.S. has recovered nearly $25 million in connection with disaster assistance applications prepared by AECOM.
“Today’s settlement sends a strong message that FEMA contractors, as well as funding recipients, must provide truthful and accurate information so that FEMA’s resources are used to help those truly in need,” said Brian Boynton, principal deputy assistant attorney general and head of the Justice Dept.’ civil division, in a statement.
