SAN FRANCISCO, CA – The Clearlake Oaks County Water District in Lake County, California, has agreed to a $1.6 million settlement for failing to return overpaid federal and state disaster relief grants.
In 2017, California experienced severe weather events, leading the Federal Emergency Management Agency (FEMA) and the California Governor’s Office of Emergency Services (Cal OES) to offer reimbursement grants. The District received such funds but failed to return the amount it had already been reimbursed by its insurer, California Joint Powers Insurance Authority (CJPIA).
The United States alleged that the District knowingly retained these overpayments and made false statements to FEMA and Cal OES. These included false quarterly reports and project closeout certifications.
U.S. Attorney Ismail J. Ramsey stressed the critical role FEMA funds play in disaster recovery and said, “It is unacceptable for any entity to divert funds through fraud.”
The total settlement amount is $1,589,725.50, with $1,192,294.12 going to the United States and $397,431.38 to Cal OES. Nicole Mitchell, a former employee of the District, initiated the case under the whistleblower provisions of the False Claims Act.
Assistant U.S. Attorney Savith Iyengar handled the case, aided by Garland He. The matter is part of the government’s broader focus on combating grant fraud, notably through the use of the False Claims Act.