New York City settles U.S. claims over Superstorm Sandy

FILE PHOTO: An automobile is seen with police tape outside homes damaged by a fire and the affects of superstorm Sandy in the Belle Harbor section of the Queens borough of New York November 14, 2012. REUTERS/Shannon Stapleton/File Photo

By Jonathan Stempel

NEW YORK (Reuters) - New York City reached a $5.3 million settlement on Wednesday to resolve charges it improperly billed the U.S. government for damage to city vehicles caused by Superstorm Sandy in October 2012.

The accord resolves claims that the city falsely certified to the Federal Emergency Management Agency (FEMA) in May 2014 that the storm had damaged Department of Transportation (DOT) vehicles beyond repair, entitling it to funds for replacements.

According to the federal government, many of the 132 passenger, commercial and heavy equipment vehicles covered by the certification had been damaged or left inoperable long before Sandy and were therefore ineligible for indemnification.

The settlement calls for New York City to pay the federal government $4.13 million and give up a potential $1.18 million of additional reimbursement.

New York City admitted and accepted responsibility for the alleged false certification to FEMA, which the government said violated the federal False Claims Act.

A judge must approve the settlement, which was filed in Manhattan federal court.

DOT spokesman Scott Gastel said the department has cooperated with the U.S. attorney's office in Manhattan since learning about possible improper reimbursements in 2016.

He also said the department has installed a new compliance officer and a centralized tracking system for its thousands of vehicles, "to reduce the risk of this ever happening again."

U.S. Attorney Geoffrey Berman in Manhattan said in a statement, "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."

Sandy's storm surge hit New York City on Oct. 29, 2012.

The storm caused widespread power outages, street and subway flooding, and an estimated 43 deaths and $19 billion of property damage there.

The case is U.S. v City of New York, U.S. District Court, Southern District of New York, No. 19-01588.

(Reporting by Jonathan Stempel in New York; Additional reporting by Brendan Pierson and Rishika Chatterjee; Editing by Diane Craft and Cynthia Osterman)