Federal contractors can defraud disaster funds

As the 2019 hurricane season begins, the Department of Justice and Bracker & Marcus LLC remind the public to be on the lookout for fraud against the Government.

The Department of Justice established the National Center for Disaster Fraud (NCDF) in the wake of Hurricane Katrina, when billions of dollars in federal disaster relief poured into the Gulf Coast region, which opened opportunities for criminals to exploit people and Government assistance during vulnerable times.

While compassion is generally shown in the aftermath of natural disasters, there are some individuals and organizations who use these tragic events to take advantage of those in need. Among others, examples of illegal activity being reported to the NCDF and law enforcement include:

  • Fraudulent submission of claims to insurance companies and the federal government;

  • Price gouging; and

  • Contractor fraud

One example is a False Claims Act verdict that went all the way to the Supreme Court. In U.S. ex rel. Rigsby v. State Farm Fire & Casualty Co., the “good neighbor” insurance company was found to have misclassified wind damage to a home—which State Farm would have had to pay for under the owner’s insurance policy—as flood-related damage, which would have been paid by the federal government’s flood insurance program.

If you suspect fraudulent activities, please contact us for a free consultation.