Aecom pays $11.8m to settle Hurricane Disaster Relief allegations

Hurricane Katrina heading towards New Orleans, Louisiana in 2005 - Elements of this image furnished by NASA (Image: lavizzara via AdobeStock - stock.adobe.com)

Engineering company Aecom has paid US$11.8 million to resolve allegations that it submitted false claims to the Federal Emergency Agency (FEMA) for the replacement of educational facilities damaged by Hurricane Katrina.

Under the Robert T. Stafford Disaster Relief and Emergency Assistance Act, FEMA provided schools and universities with public assistance (PA) funds for the repair or replacement of facilities damaged by Hurricane Katrina in 2005.

Funding was limited to the cost of repairing a damaged facility, unless that cost exceeded 50% 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.

Aecom’s role involved preparing requests for PA funds on behalf of applicants that included damage descriptions, estimates of the cost to repair damage and estimates of the cost to replace structures.

The settlement resolves 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, which resulted in certain applicants receiving PA funds in excess of what FEMA rules permitted.

In some cases, the facility was entitled only to repair rather than replacement costs. 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.

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.

The settlement with Aecom resolves claims brought in a lawsuit filed under the whistleblower provisions of the False Claims Act, which permit private parties to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery.

The United States has now recovered nearly $25 million 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.

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