DOJ joins whistleblower case alleging AECOM led FEMA fraud scheme; Xavier University of Louisiana settles for $12M

NEW ORLEANS, June 3, 2020 /PRNewswire/ -- The US Department of Justice today joined a newly unsealed whistleblower lawsuit filed by Phillips & Cohen LLP that alleges AECOM and certain institutions in New Orleans cheated the Federal Emergency Management Agency out of more than $100 million in disaster relief funds by repeatedly submitting fraudulent information in violation of FEMA rules.

"The government, after methodically and thoroughly investigating our client's allegations, decided to intervene in the case," said Amy Easton, a partner and whistleblower attorney at Phillips & Cohen. "We are fortunate to have such a strong team of DOJ lawyers pursuing this case."

The alleged fraud involved FEMA disaster relief funds designated for nonprofit educational and religious institutions that were damaged by Hurricane Katrina.

The "qui tam" (whistleblower) lawsuit alleges that AECOM, working on behalf of institutional applicants, submitted many false damage claims using fake photographs and other falsified information to boost disaster fund payments.

The FEMA Public Assistance Program pays to repair facilities damaged by natural disasters and restore them to their pre-disaster condition. If the repair costs exceed more than 50% of the cost of a new building, then FEMA would pay for a new building.

The lawsuit alleges that the false damage claims caused FEMA to pay for new buildings instead of less costly repairs, as FEMA rules require.   

"The government trusted AECOM, a prime contractor, with billions of dollars in taxpayer funds to help rebuild New Orleans after the devastation of Hurricane Katrina," said Jeffrey Dickstein, a partner and whistleblower attorney at Phillips & Cohen. "AECOM was expected to work with these important New Orleans institutions so that they received every dollar they were entitled to, but no more than that." 

Xavier University of Louisiana, which the whistleblower and government alleged participated in the scheme, has paid the government $12 million to settle its liability in the qui tam case. The Archdiocese of New Orleans also is named as a defendant in the case.

Xavier used FEMA funds to replace the Xavier gymnasium and the student center and make significant upgrades to its electrical distribution center, claiming all had suffered more extensive damage from Katrina than actually occurred.

Phillips & Cohen filed the qui tam lawsuit alleging violations of the federal False Claims Act on behalf of Robert Romero, an AECOM employee, in 2016 in federal district court in New Orleans. The lawsuit was filed under seal as required by law to give the government time to investigate. The court unsealed the qui tam complaint today.

"Mr. Romero thought it was important that FEMA funds were given to those who truly needed the money to repair the catastrophic damage from Katrina and its aftermath, in accordance with the rules," said Peter Chatfield, a partner and whistleblower attorney at Phillips & Cohen.

The False Claims Act allows private citizens who know of entities and individuals defrauding the federal government to file lawsuits against them and recover funds on the government's behalf. The law offers whistleblowers protection against job retaliation and rewards of 15% to 25% percent of the recovery when the government joins a case.

About Phillips & Cohen
Phillips & Cohen has represented whistleblowers for over 30 years and is the nation's most successful law firm representing whistleblowers, with more than $12.3 billion recovered from its cases. The firm represents whistleblowers in qui tam lawsuits as well as SEC, CFTC and IRS cases.

www.phillipsandcohen.com

SOURCE Phillips & Cohen LLP

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