After Hurricane Katrina, FEMA established public assistance programs, providing government funding to schools and universities to repair and replace their damaged facilities. However, the financial relief was limited to the cost to restore facilities to their pre-disaster condition and full replacement was only available when repair estimates exceed prescribed thresholds.
According to the DoJ press release, a whistleblower has alleged that an engineering firm responsible for providing FEMA with repair estimates made false claims to increase funding for the facilities. The whistleblower also alleges that some of the schools and universities were complicit in the scheme, and falsely certified the estimates. In fact, one university has already agreed to pay $12 million to resolve its potential liability.
This lawsuit was initiated by a whistleblower under the False Claims Act (FCA). The FCA allows individuals who uncover fraud against the government to bring a civil action on behalf of the government. These whistleblowers—known as relators—are afforded significant protections from retaliation and are eligible to receive a share of any recovery.
In this case, the whistleblower will receive approximately $2.3 million of the initial $12 million recovery. The whistleblower also stands to receive a share of any other settlements or awards going forward.
The settlement and lawsuit discussed above are based on allegations only. No determination of guilt or liability has been made.