Aecom pays $11.8m to settle Hurricane Katrina allegations

Fishing boats were blown ashore by Katrina in Alabama (Public Domain)
US engineer Aecom has agreed to pay $11.8m to resolve allegations that it knowingly submitted false claims to the Federal Emergency Management Agency (FEMA) for the replacement of educational facilities in Louisiana damaged by Hurricane Katrina in 2005.

The settlement arose from a lawsuit filed by a whistleblower who worked for Aecom. The US Department of Justice (DOJ) joined that lawsuit in June 2020.

Identified by the DOJ as an Aecom project specialist, the whistleblower, Robert Romero, will receive some $2.4m from the Aecom settlement under provisions in the False Claims Act.

They permit private parties to file suit for false claims and share in a portion of the money recovered by the government.

In this case, the DOJ said Aecom served as a technical-assistance contractor to FEMA between 2006 and 2010.

In this role it prepared requests for public assistance funds on behalf of institutional applicants, including damage descriptions and estimates of repair and replacement costs.

The DOJ alleged that Aecom project officers submitted fraudulent requests for funds for several educational facilities in New Orleans. This resulted in some applicants receiving more than FEMA rules permitted.

In some cases, facilities were awarded replacement costs when they were only entitled to repair costs.

According to the government’s complaint, Aecom supervisors “reviewed and did not correct disaster assistance applications that included materially false design, damage and replacement eligibility descriptions”.

These facilities included the gymnasium, student centre, and electrical grid at Xavier University of Louisiana and a cafeteria building at the Roman Catholic Archdiocese of New Orleans’ St. Raphael the Archangel School.

The DOJ noted that the claims resolved by the settlement are allegations only, and there has been no determination of liability.

Altogether, the US government recovered nearly $25m in connection with the disaster assistance applications prepared by Aecom.

It previously settled with Xavier University of Louisiana and the Roman Catholic Archdiocese of New Orleans with respect to their alleged role in the submission of the false certifications for FEMA funding prepared by Aecom.

As part of the resolution with Xavier, Robert Romero received approximately $2.3m.

Brian Boynton, the head of the Justice Department’s Civil Division, said the Aecom settlement sent “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”.

Duane Evans, US attorney for the Eastern District of Louisiana, said the government was committed to using “all available remedies to address signs of fraud, waste and abuse”.

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