U.S.-based architecture firm AECOM has agreed to pay $11.8 million to settle allegations that it violated the False Claims Act by knowingly submitting false claims to the Federal Emergency Management Agency (FEMA).
The settlement involved the replacement of certain educational facilities located in Louisiana that Hurricane Katrina damaged, the U.S. Department of Justice said in a statement.
FEMA provided institutional applicants, such as schools and universities, with public assistance funds for repairing or replacing facilities damaged by Hurricane Katrina in 2005.
Funding was limited to the cost of repairing a damaged facility unless that cost exceeded 50 per cent of the facility’s replacement cost, in which case full-replacement funding was available.
Between 2006 and 2010, AECOM served as a technical assistance contractor in support of FEMA disaster recovery efforts following Hurricane Katrina.
In this role, AECOM prepared requests for public assistance funds on behalf of applicants, including damage descriptions.
It also estimates the cost to repair damage and the cost to replace structures.
The settlement resolved allegations that an AECOM project officer deployed to Louisiana for the Hurricane Katrina recovery effort submitted to FEMA fraudulent requests for disaster assistance funds for several educational facilities in New Orleans.
This resulted in certain applicants receiving public assistance funds in excess of what FEMA rules permitted, including in some cases because the facility was entitled only to repair rather than replacement costs.
The facilities included the gymnasium, student centre, and electrical grid at the Xavier University of Louisiana and a cafeteria building at the Roman Catholic Archdiocese of New Orleans’ St. Raphael the Archangel School.
According to the allegations in the government’s complaint, AECOM supervisors reviewed and did not correct disaster assistance applications that included materially false design, damage, and replacement eligibility descriptions.
As part of the settlement with AECOM, the whistleblower, Robert Romero, would receive more than $2.4 million.
The U.S. has now recovered nearly $25 million in connection with the disaster assistance applications prepared by AECOM.