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New Orleans archdiocese to pay over $1M in Hurricane Katrina fraud settlement

American Crime Story Katrina
Houses remain surrounded by floodwaters from Hurricane Katrina in New Orleans, Louisiana, September 4, 2005. |

The Roman Catholic Archdiocese of New Orleans has agreed to pay more than $1 million as part of a settlement over allegations of falsified Hurricane Katrina aid claims.

The settlement came in response to allegations that the archdiocese had violated the False Claims Act by knowingly submitting false claims to the Federal Emergency Management Agency (FEMA) to repair facilities damaged by Katrina, a 2005 Category 5 storm that caused billions of dollars in damage.

According to a U.S. Department of Justice statement on Monday, the settlement was given final approval by the U.S. Bankruptcy Court for the Eastern District of Louisiana on Oct. 26.

“FEMA offers critical financial support when natural disasters strike,” stated Acting Assistant Attorney General Brian M. Boynton of the DOJ’s Civil Division.

“The Department of Justice is committed to ensuring that these taxpayer funds are properly spent to help disaster victims rebuild their communities.” 

Last year, a lawsuit was filed accusing the archdiocese of signing certifications for FEMA funding from 2007 to 2013 that contained inaccurate damage descriptions and repair estimates prepared by AECOM, an architecture and engineering firm based in Los Angeles, California.  

Robert Romero, an AECOM Project Specialist, filed a whistleblower complaint under the False Claims Act against AECOM, the archdiocese, Dillard University, Xavier University of Louisiana and AECOM employee Randall Krause.

“Defendant Archdiocese of New Orleans, a FEMA Program applicant, knowingly, recklessly, and/or with willful blindness submitted and/or caused to be submitted to FEMA false and misleading documentation regarding the existence and extent of damage to its facilities, thereby increasing the amount of disaster relief funding that FEMA provided by at least $46 million,” claimed the lawsuit.

According to the complaint, the archdiocese received approximately
$10 million of additional FEMA funding for a school building based on an inflated repair estimate and “fraudulently” received roughly $36.2 million of additional FEMA funding for two assisted-living facilities. The complaint claims it was misrepresented that “Katrina caused catastrophic damage to the four upper floors of both buildings.”

“Based on this fraudulent damage assessment, FEMA awarded both buildings full replacement funding,” the complaint continued. “But in fact, the upper floors suffered no flood damage and limited, if any, wind damage, and so the buildings should have qualified only for repair funding.”

The archdiocese released a statement in June 2020 denying any wrongdoing in the matter, arguing that it “worked diligently and relied upon the knowledge and expertise of FEMA and their designated agencies and field representatives.”

“Every dollar of FEMA funds received has gone back into the restoration of parish, school and other properties to serve the people of the Greater New Orleans community,” the archdiocese stated, as reported by Nola.com.

“We deny the allegation that the Archdiocese of New Orleans knowingly conspired to submit false information. We have cooperated with the federal government’s investigation and will continue to work with them as we resolve this claim.”

Whistleblower Romero received approximately $199,500 as a result of the settlement. 

"The claims alleged in the lawsuit, including those resolved by the Archdiocese of New Orleans, are allegations only, and there has been no determination of liability," the DOJ statement reiterates. 

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