It is no surprise that fraudsters would exploit the COVID-19 pandemic to cheat the federal government out of millions in relief funds. This was also the case in the wake of Hurricane Katrina. AECOM, a California-based architecture and engineering firm, conspired with a handful of New Orleanian relief applicants to cheat the Federal Emergency Management Agency (FEMA) out of more than $100 million in disaster relief funds designated for non-profit educational and religious institutions. The scheme was brought to light by Robert Romero, an AECOM project specialist and False Claims Act whistleblower.
Between 2005 and 2019, AECOM received over $300 million from FEMA to prepare damage and repair estimates to determine applicants’ relief eligibility. Romero’s 2016 qui tam lawsuit, unsealed today, alleges that AECOM personnel knowingly submitted false photographs, claimed damage to non-existent buildings, and exaggerated repair estimates to increase funding for applicants. It alleges AECOM management was aware as early as 2011 but failed to notify FEMA, and that certain applicants conspired with AECOM by certifying the reports’ accuracy.
One such applicant was Xavier University of Louisiana, which misrepresented the degree of damage to various campus facilities. Xavier settled its liability for $12 million, of which Mr. Romero received approximately $2.3 million. Under the False Claims Act, which allows private parties to hold companies accountable for defrauding the federal government, whistleblowers are entitled to 15 to 30 percent of collected proceeds. As the federal government continues to recoup losses from AECOM’s fraudulence, Mr. Romero will continue to collect. Other applicants include Dillard University and the Archdiocese of New Orleans.
The Justice Department announced today that it is intervening in Mr. Romero’s suit, as is its right under the False Claims Act. The U.S. Attorney’s Office for the Eastern District of Louisiana said today that “Federal disaster funds are an instrumental component in the effort to assist 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.” The Justice Department is receiving support from FEMA’s Office of Chief Counsel and the Department of Homeland Security’s Office of Inspector General.