New York City Admits Defrauding FEMA Out of $5.3 Million in Hurricane Sandy Aftermath

New York City has agreed to reimburse the federal government $5.3 million for false claims to the Federal Emergency Management Agency (FEMA) following the destruction caused by Hurricane Sandy in 2012.

NPR reported that city officials claimed extensive damage had been done to the New York City Department of Transportation's fleet of vehicles in the storm, but some of the vehicles replaced with FEMA money had been out of operation for years before 2012, according to the lawsuit brought against the city. They had, in many cases, been marked for salvage.

The city reached a tentative settlement on Wednesday to repay the $5.3 million in FEMA funds.

In a complaint submitted alongside the settlement, the U.S. Attorney for the Southern District of New York, Geoffrey Berman, also conceded that Department of Transportation workers had knowingly made false statements about the vehicles when they certified the damage or made the recommendations "with reckless disregard or willful blindness as to their truth."

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Cars piled on top of each other at the entrance to a garage on South Willliam Street in Lower Manhattan October 31, 2012, in New York, as the city began to clean up after Hurricane Sandy. STAN HONDA/AFP/Getty Images

The Transportation Department has said it first learned of the problem in 2016, discovering that city workers had considered only whether vehicles were damaged by the storm and ignored their state of disrepair prior to the floods.

In a statement to NPR, the department said it had "cooperated fully" with an investigation and put in place procedures to stop the fraud from occurring again. As such, the city is now tracking the thousands of fleet vehicles through a centralized system, with a new grants compliance officer put in place.

However, the settlement outlines that an email from a city employee detailing that some of the vehicles used to claim funds from FEMA had been "junk for years," was sent to the department's deputy commissioner as early as 2014. That same deputy commissioner was responsible signing the certification showing Sandy had caused the damage to the vehicles

According to The New York Times, the warnings went unheeded, and city officials failed to conduct in-person inspections of the vehicles.

Following Hurricane Sandy, the city sought more than $3 million to replace seven trucks used for paving. They had been sitting in a dump since 2009, marked for salvage and being picked apart by vandals, according to the city's own records.

Workers also looked to replace a trailer and a trash pump with the FEMA funds. Both had been recorded as inoperable in 2010. Action was finally taken by the Transportation Department only after it became aware the U.S. Attorney's Office had begun an investigation.

Berman has outlined how fraud cases such as these undermine the life-saving work done by FEMA. "When people lie to FEMA about the cause of property damage in order to reap a windfall, it compromises FEMA's ability to provide financial assistance to legitimate disaster victims in desperate need," he said in a statement.

New York City Admits Defrauding FEMA Out of $5.3 Million in Hurricane Sandy Aftermath | U.S.