Dive brief:
- AECOM has agreed to pay $11.8 million to settle allegations that he knowingly submitted false claims to the Federal Emergency Management Agency for replacement of New Orleans education facilities damaged by Hurricane Katrina in 2005, according to a news release from Department of Justice of October 24.
- The DOJ alleged that the Dallas-based company violated the False Claims Act in its role as a technical assistance contractor supporting FEMA’s disaster recovery efforts between 2007 and 2013. FEMA paid AECOM more than $300 million to help institutions prepare Katrina damage estimates to qualify for federal public assistance grants.
- The DOJ alleges in a 2016 demands that AECOM systematically used inflated repair estimates and other false information to get FEMA to pay more money than claimants were entitled to. The claims resolved by the settlement are allegations only and there has been no determination of liability, according to the DOJ statement.
Diving knowledge:
The settlement resolves claims that former AECOM project manager Robert Romero filed the 2016 lawsuit under the False Claims Act’s whistleblower provisions, which allow private parties to file suit on behalf of the U.S. and share a part of the government’s recovery.
AECOM denies the government’s claims and said it did not direct any of the funds in question, and that it is proud of the rebuilding work it did in Louisiana.
“AECOM expressly disclaims any liability or misconduct related to our work in New Orleans following Hurricane Katrina,” AECOM spokesman Jason Marshall said in an email. “To avoid the expense and distraction of litigation related to events that occurred more than 15 years ago, AECOM has agreed to pay the government a small fraction of the damages it sought.”
The DOJ case alleges one AECOM’s project officer deployed to Louisiana allegedly misrepresented repair costs for several New Orleans educational facilities compared to replacement costs, leading the institutions to receive funds in excess of what allowed by FEMA regulations. Public aid funding was used to repair damage, unless the cost of repair exceeded 50% of the replacement cost; in this scenario, financing was granted to completely replace the facility.
The fraudulent claims include “damage to non-existent concrete building foundations and fictitious basements, systematic inflation of cost estimates for damaged items, inflation of building square footage, and presentation of fraudulent damage photographs downloaded from the Internet,” the lawsuit said.
AECOM supervisors reviewed and failed to correct disaster assistance requests that included descriptions of replacement eligibility, damage and materially false designs, the government’s complaint alleges.
“FEMA plays an essential role in helping communities recover from natural disasters,” said Senior Assistant Attorney General Brian M. Boynton, chief of the Justice Department’s Civil Division. “Today’s agreement sends a strong message that FEMA contractors, as well as funding recipients, must provide truthful and accurate information so that FEMA resources are used to help those in real need.”
The feds arrived earlier agreements with Xavier University of Louisiana and the Roman Catholic Archdiocese of New Orleans regarding his alleged involvement in the false claims that AECOM allegedly orchestrated, bringing the recovered funds to nearly $25 million in total.
This article has been updated with AECOM’s feedback.
