Catch of the Week: AECOM

Last week’s Department of Justice (DOJ) Catch of the Week goes to Dallas-based architecture and engineering firm AECOM.  Last Tuesday (October 24), the company agreed to pay $11.8 million to settle charges it violated the False Claims Act by improperly billing the Federal Emergency Management Agency (FEMA) for disaster assistance funding in the wake of Hurricane Katrina.

Under the Robert T. Stafford Disaster Relief and Emergency Assistance Act, FEMA provided institutions, such as schools and universities, public assistance funds to repair or replace facilities damaged by Hurricane Katrina.  Funding was limited to the cost of repairing a damaged facility.  But if that cost were more than 50% of the facility’s replacement cost, FEMA would provide full-replacement funding.

According to the government, AECOM improperly secured FEMA disaster assistance funding for several educational facilities in New Orleans, including Xavier University and the Roman Catholic Archdiocese of New Orleans’ St. Raphael the Archangel School.  The end result was AECOM causing FEMA to payout excessive disaster funding, in many cases because AECOM secured replacement funding when only repair funding was warranted.  The government claimed AECOM supervisors “reviewed but did not correct disaster assistance applications that included materially false design, damage and replacement eligibility descriptions.”

The government previously settled with Xavier University and the Roman Catholic Archdiocese of New Orleans for their alleged role in the scheme, which the government claimed involved submitting the false certifications for FEMA funding that AECOM prepared.  The AECOM settlement brings the total government recovery in this matter to roughly $25 million.

In announcing the settlement, the government stressed the critical nature of disaster relief and its commitment to go after those that engage in fraud to secure it.  According to DOJ Civil Division Chief Brian Boynton:

FEMA plays an essential role in helping communities recover from natural disasters. . . .  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.

U.S. Attorney Duane Evans for the Eastern District of Louisiana echoed this sentiment: “Federal disaster funds are instrumental in the effort to aid disaster victims with their recovery. . . .  The favorable resolution of this False Claims Act matter illustrates the collaborative efforts and firm commitment by our federal partners to use all available remedies to address signs of fraud, waste and abuse.

Like the majority of False Claims Act actions, this one involved allegations brought by a whistleblower under the qui tam provisions of the False Claims Act, which allows private individuals to bring lawsuits against those defrauding the government.  In return, successful whistleblowers are entitled to up to 30% of the government’s recovery.  Over the past 25 years, whistleblowers have recovered billions of dollars in whistleblower rewards under the False Claims Act and have been responsible for tens of billions of dollars in government recoveries.

The whistleblower in this case was Robert Romero, who will receive a whistleblower award of more than $2.4 million from the government’s recovery.

If you would like more information on what it means to be a whistleblower or think you may have information relating to government contract fraud, please feel free to contact us so we can connect you with a member of the Constantine Cannon whistleblower lawyer team for a free and confidential consultation.

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