Hurricane Katrina Contractor Accepts $4 Million Judgment Under the False Claims Act
Company Was to Set up, Operate Base-Camp for First-Responder Personnel
Following Hurricane Katrina
WASHINGTON – The United States has settled its claims filed under the False Claims Act against Lighthouse Disaster Relief and its partners, Gary Heldreth and Kerry Farmer. In its complaint, which was filed in the U.S. District Court for the Middle District of Louisiana, the United States alleged that Lighthouse, Heldreth, and Farmer accepted a $5.3 million payment for work that was not completely performed on a contract with the Department of Homeland Security.
The United States filed suit against Heldreth, Farmer and Lighthouse alleging that the defendants knowingly breached their contract to build and operate a basecamp to house and feed first responders who went to New Orleans to help with rescue and recovery efforts after Hurricane Katrina. The complaint alleged that the defendants made false statements to FEMA employees in order to be paid prematurely. The defendants then failed to build and staff a basecamp sufficient to house the number of first responders called for in their contract.
The settlement agreements require Heldreth, Farmer and Lighthouse to accept a judgment of $4 million less the approximately $1.3 million previously garnished by the government.
"This settlement demonstrates that the United States will aggressively pursue those who exploit the taxpayers in times of disaster,"said Tony West, Assistant Attorney General for the Civil Division.
"Protecting disaster relief funds from fraud, waste or abuse of any kind has been, and remains, a top priority of this office and of the Hurricane Katrina Fraud Task Force" said David R. Dugas, U.S. Attorney for the Middle District of Louisiana and Executive Director of the National Center for Disaster Fraud. "This settlement is part of the ongoing efforts to ensure that disaster relief funds are not improperly diverted from their intended, and critically important, purpose."
This investigation and litigation was conducted by the U.S. Attorney’s Office for the Middle District of Louisiana, the Civil Division of the U.S. Department of Justice, with the assistance of the Office of Inspector General of the Department of Homeland Security.
The Civil Division of the U.S. Department of Justice, the U.S. Attorney’s Office for the Middle District of Louisiana and the Office of Inspector General for the Department of Homeland Security are members of the Justice Department’s Hurricane Katrina Fraud Task Force.