Disaster relief is an area ripe for abuse and, in many instances, can prove extremely costly to taxpayers due to the fact that in major national emergencies such as Hurricane Katrina and Superstorm Sandy, the Government is pressed to expend vast resources in a very short amount of time, often with inadequate controls. For many, in these circumstances, the temptation to cheat the Government is too great to resist.
The Federal Government, through agencies like the Federal Emergency Management Agency (FEMA), frequently provide relief in the wake of natural disasters in order to help with cleanup, repair damage, and provide assistance to those persons affected. In the rush to provide aid, however, agencies may not be as careful in vetting individuals and businesses that are awarded contracts, which can lead to fraud against the Government. Companies hired to assist with disaster relief may defraud the Government in a multitude of ways, such as through overbilling, billing for services not actually provided, and provision of substandard products and materials.
These improper practices and others can form the basis for whistleblower lawsuits under the False Claims Act.
Real World Examples of Recent Disaster Relief Fraud False Claims Act Cases:
- 2011: The U.S. Justice Department intervened in a whistleblower lawsuit alleging that Jacquet Construction Services LLC, a construction company, instructed employees to submit fake records to receive funds from FEMA in the aftermath of Hurricane Katrina. The company held a contract with the Government under which it was paid to maintain trailers occupied by victims of the hurricane, but, according to the whistleblower (a former employee), Jacquet Construction submitted fake inspection forms and received payment for work not performed.