Jindal administration promises thorough investigation; firm's owner denies irregularities
A company run by members of the Kailas family, major developers and landowners in the New Orleans area, may have overbilled the state's Road Home program by hundreds of thousands of dollars, according to a report that aired Thursday on WWL-TV. The company, Lago Construction, owned by Praveen Kailas, was hired by the state to inspect repairs to rental units done through the state's Small Rental Property Program, a subset of the Road Home.
Developer Praveen Kailas is planning to redevelop the old Woolworth's building at Canal and Rampart streets in New Orleans. A WWL-TV report that aired Thursday accused Kailas of overbilling the state for work on the Road Home program; Kailas denies it. Members of the Kailas family have donated generously to Gov. Bobby Jindal's political campaigns. The Jindal administration, which runs the small-rental program, told WWL-TV that it would conduct an investigation, adding that the Kailas' ties to the governor would not get in the way of a thorough inquiry.
"We have zero tolerance for fraud," Jindal spokesman Kyle Plotkin told the station.
Between mid-2011 and mid-2012, Lago billed the federally funded program roughly $1.5 million, the station reported.
Praveen Kailas and his brother, Naveen Kailas, together billed for nearly $600,000 worth of work over that time, with Praveen Kailas billing at more than $200 per hour, according to records posted by WWL. The two brothers billed for 8 hours of work for almost every weekday of the year, the station reported.
But the station quoted two former employees -- who spoke on condition of anonymity -- who said the brothers were actually working on a variety of other projects during that time.
Lago issued a statement in response to the story saying that the company did not bill for work that employees didn't do. The statement also said that "Lago employees often work outside of 8 a.m. to 5 p.m. daily."
A Jindal spokesman said the administration would turn over some program records to the state's inspector general as well as the inspector general for the U.S. Department of Housing and Urban Development.