In the wake of a natural disaster, the Federal Emergency Management Agency (FEMA), Red Cross, insurance companies, and many other agencies mobilize quickly to help victims by providing food, water, shelter, and other necessities. Disaster relief organizations help the victims of hurricanes, tornadoes, wildfires, and more reclaim their lives after a catastrophic event. In 2021 alone, the United States spent over $100 billion on disaster relief aid. However, fraudsters and scammers often try to capitalize on the situation by filing fraudulent claims to get money from the government.
What is Disaster Relief Fraud?
Disaster relief fraud against the government is when individuals and businesses file “false Claims” to try to profit from government aid intended to help aid those in need following a natural disaster. When scammers exploit governmental catastrophe funding, everyone gets hurt. As a result of disaster fraud, less money goes to those in need.
Examples of Disaster Relief Fraud
A few examples of disaster relief fraud include:
- Price gouging
- Falsifying information on applications
- Providing false photos of damages
- Claiming more damages than actuality
- Delivering services that do not align with what is being charged to the government
- Providing food and supplies that are worth less than the amount billed
FEMA SCAMS DURING HURRICANE KATRINA & RITA
Following Hurricane Katrina, nearly $120 billion in federal funds were disbursed to the Gulf Region. At this time, the federal government established the National Center for Disaster Fraud (NCDF) to fight against the rampant fraud committed by contractors that claimed to help those in need. Hurricane Katrina caused $125 billion in damages and about 1,800 fatalities. The total amount of funds lost to FEMA fraud is estimated to be between $600 million and $1.4 billion.
In 2020, the U.S. Department of Justice intervened in a lawsuit filed by Phillips & Cohen against AECOM, a consultant firm working on behalf of universities and institutional applicants, for allegedly cheating FEMA out of more than $100 million in disaster relief funds by repeatedly submitting false damage claims to boost disaster relief fund payments. The case settled for $11.8 million in October 2023.
In the same lawsuit, Xavier University of Louisiana agreed to pay $12 million to settle part of the whistleblower lawsuit brought by Phillips& Cohen. The settlement stems from allegations of using FEMA funds to replace buildings and make upgrades, claiming all had suffered more extensive damage from Katrina than had actually occurred. The total amount of the three settlements with the government is $24.85 million.
PPP FRAUD & COVID-19
In addition to the widespread devastation caused by COVID-19, it also brought about the “biggest fraud in a generation.” While PPP aided many Americans whose employment was impacted by the pandemic, it also caught the attention of many international fraudsters and scammers. During the pandemic, an estimated $76,000,000,000 – $100,000,000,000 was lost to PPP fraud and scams.
FEMA FRAUD & HURRICANE IAN
September 28, 2022, Hurricane Ian made landfall as a category four hurricane, the deadliest hurricane to touchdown on the coast of Florida since 1935. The hurricane caused an estimated $113 billion in damages and was responsible for 160 fatalities. During Hurricane Ian, various types of disaster relief fraud were reported. These fraudulent activities often involve scams targeting both disaster victims and government relief programs. FEMA scams were among the most common. Some individuals and groups filed fraudulent claims with the Federal Emergency Management Agency (FEMA) to receive disaster relief funds they were not entitled to. This included using false information or claiming to be victims of the hurricane when they were not affected.
How Can You Report Disaster Relief Fraud?
If you suspect an individual or organization is committing disaster relief fraud against the U.S. government, you may be entitled to a significant False Claims Act whistleblower award.
If you are considering whistleblowing on disaster relief fraud or FEMA fraud, it’s essential to understand your rights and how to best protect yourself while bringing potential wrongdoing to light. Here are some actions a potential whistleblower can consider and keep in mind when deciding if they are ready to blow the whistle on disaster relief fraud.
- Gather evidence carefully
- Consult with an experienced attorney confidentially
- Your attorney will advise you on the best federal offices and organizations to report to and contact
- FEMA Investigations & Inspections Department
- State Consumer Protection Offices
- DHS Office of the Inspector General (OIG)
- National Center for Disaster Fraud (NCDF)
- IdentifyTheft.gov
- Avoid public discussions
- Prepare for possible outcomes
At Phillips & Cohen, we can help potential whistleblowers bring their claims forward. If you are aware of disaster relief or COVID fraud and would like to discuss with experienced and successful whistleblower attorneys your options, please contact Phillips & Cohen for a free and confidential consultation.
Phillips & Cohen Protects Disaster Relief Fraud Whistleblowers
Phillips & Cohen has represented whistleblowers for over 30 years and is the nation’s most successful law firm in that field, with more than $12.3 billion in civil settlements and criminal fines collected as a result of their whistleblower cases. Phillips & Cohen represents whistleblowers in qui tam lawsuits as well as cases brought under the whistleblower programs of the Securities and Exchange Commission, the Commodity Futures Trading Commission, and the Internal Revenue Service.