Case 2:25-cv-01858-WBV-JVM Document 1 Filed 09/10/25 Page 1 of 10

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF LOUISIANA

SUNAE VILLAVASO CIVIL ACTION

VERSUS NO.

THE CITY OF NEW ORLEANS SECTION

COMPLAINT

NOW COMES Complainant, Sunae Villavaso, who asserts the following claims for relief:

Parties

1.

Sunae Villavaso is a person of the full age of majority domiciled in the State of Louisiana,

Parish of Orleans.

2.

Defendant, the City of New Orleans, is a political subdivision and municipality organized

and existing under the laws of the State of Louisiana, with the capacity to sue and be sued. At all

times material hereto, the City of New Orleans was the employer of Villavaso.

Jurisdiction and Venue

3.

Jurisdiction is proper in this Honorable Court pursuant to 28 U.S.C § 1331 and 31 U.S.C

§ 1367 as this matter arises under federal law, including the False Claims Act, 31 U.S.C. § 3729,

et seq., and under Louisiana state law.

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4.

Venue is proper in this Honorable Court in part pursuant to 28 U.S.C §1391 as a substantial

part of the events or omissions giving rise to the claim occurred within the Eastern District of

Louisiana.

Factual Background

5.

The American Rescue Plan Act (“ARPA”) is a federal fiscal recovery aid for state and local

governments to mitigate the fiscal effects stemming from the COVID-19 public health emergency.

6.

ARPA was signed into law on March 11, 2021, disbursing $1.9 trillion of relief and support

directly to state and local governments.

7.

Some $386,000,000.00 in federal ARPA funds were disbursed to the City of New Orleans.

8.

The City of New Orleans allocated $11,000,000.00 in ARPA funds to the City’s Office of

Workforce Development.

9.

At all times material to this suit, Career Coaches employed by the City’s Office of

Workforce Development were paid by the City of New Orleans based on hours reported by the

employee on timesheets certified as accurate by the employee and transmitted to the City by email

– that is, by wire within the meaning of 18 U.S.C. § 1343 – using instrumentalities of interstate

commerce and transmitting writings and representations in interstate commerce.

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10.

At all times material to this suit, the City of New Orleans paid its employees by direct bank

deposit – that is, by wire within the meaning of 18 U.S.C. § 1343 – using instrumentalities of

interstate commerce and transmitting funds in interstate commerce.

11.

At all times material to this suit, Villavaso was employed by the City of New Orleans as

Director of the City’s Office of Workforce Development.

12.

During her employment by the City, Villavaso discovered instances of payroll fraud and

the misuse and misallocation of ARPA funds by City employees.

13.

Villavaso sought to stop and remedy instances of payroll fraud and the misuse and

misallocation of ARPA funds by reporting such illegal conduct to numerous City employees and

officials, including Mayor Latoya Cantrell.

14.

On April 25, 2023, Villavaso appeared before the New Orleans City Council and explained

how the ARPA funds would be allocated; namely that ARPA funds would be allocated in

accordance with the provisions of the Good Jobs Challenge promulgated by the Unted States

Department of Commerce.

15.

Villavaso later learned that Director of Administration and Planning for the City of New

Orleans, Courtney Story, was ignoring the protocol for the disbursement of ARPA funds and

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instead was directing ARPA funds to recipients selected by Story alone. Among these recipients

was Undue Medical Debt, LLC.

16.

Villavaso reported and complained about the misuse of ARPA funds and about Story’s

conduct to numerous City officials, including directly to Mayor Cantrell during a three-hour

meeting at Mayor Cantrell’s house on January 21, 2024.

17.

At the conclusion of the January 21, 2024 meeting, Mayor Cantrell informed Villavaso that

Story would be fired.

18.

At a January 23, 2024 meeting attended by CAO Gilbert Mantano, Villavaso, Story, and

others, Story stated that Villavaso should be removed from any involvement in the allocation of

ARPA funds.

19.

The next day, January 24, 2024, Mayor Cantrell informed Villavaso that Story would not

be fired because CAO Montano needed Story to remain employed by the City.

20.

Ultimately, Story left her position at the City and was hired by a beneficiary of her ARPA

funding decisions, Undue Medical Debt, where Story is now the Vice President of Government

Initiatives.

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21.

On March 4, 2024, Villavaso attended a meeting with CAO Montano, Christina Hamilton

(Deputy CAO of Human Resources), and Tyra Brown (Director of Housing Policy and

Community Development). Montano and Hamilton informed Villavaso that she was effectively

being demoted and that Brown would be Villavaso’s supervisor with immediate authority over

Villavaso’s employment. Montano told Villavaso that she “needs to be managed.”

22.

On May 19, 2024, Villavaso sent an email to Mayor Cantrell complaining about the

ongoing illegal and improper use of ARPA funds.

23.

On May 24, 2024, Villavaso was summoned to Mayor Cantrell’s office to meet the Mayor

and Chief of Staff Clifton Davis regarding Villavaso’s May 19, 2024 email. Mayor Cantrell and

Davis were very annoyed that Villavaso sent the email. Mayor Cantrell continuously stated

throughout the meeting “that was for me baby,” meaning that Villavaso’s email was meant to

implicate Mayor Cantrell in the misuse of ARPA funds. Both Mayor Cantrell and Davis objected

strenuously to Villavaso’s putting her complaints in writing. Mayor Cantrell remarked that

Villavaso’s act of putting her complaints in writing meant that “maybe Ms. Villavaso needs to find

her happiness elsewhere.”

24.

During the Summer of 2024, Villavaso learned of possible payroll fraud by certain career

coaches in the Office of Workforce Development.

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25.

In particular, Villavaso discovered that one career coach was pursuing an internship at the

same time she was supposed to be working for the City. The employee submitted time sheets

falsely reflecting work for the City that she did not do but for which she was paid by the City.

26.

In January 2025, Villavaso discovered that the Business Strategies Manager, who was paid

in part by ARPA funds, committed payroll fraud by falsely claiming that she attended – and was

paid for attending – the Louisiana Wind Energy Week Conference hosted by Greater New Orleans,

Inc.

27.

After Villavaso received confirmation by the hosting authority, GNO, Inc., she wrote up

the employee for payroll fraud as well as other concerns.

28.

Villavaso duly reported the instances of payroll fraud to her supervisor, Tyra Brown, and

recommended that the employees be fired.

29.

Although Brown confirmed the payroll fraud that Villavaso complained of, Brown

dismissed Villavaso’s write-up and refused to fire the employees guilty of payroll fraud.

30.

Mayor Cantrell and other City employees dismissed all of Villavaso’s attempts to address

and remedy the unlawful conduct, acts, and practices, of which Villavaso complained.

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31.

Instead, The City of New Orleans terminated Villavaso’s employment effective April 18,

2025.

32.

The City of New Orleans fired Villavaso in retaliation for her objections to and attempts to

remedy The City’s false claims and illegal acts and practices.

Count I. Retaliation – Federal Law.

33.

Villavaso re-avers and re-alleges the preceding allegations of this Complaint.

34.

At all times material hereto, Villavaso was an employee of the City of New Orleans entitled

to protection from retaliation by the City of New Orleans and those acting on its behalf pursuant

to 31 U.S.C. § 3730(h).

35.

Villavaso reported to the City’s officers and employees, both verbally and in writing, the

foregoing false claims and unlawful conduct by the City and its officers and employees.

36.

As set forth, the City of New Orleans discharged Villavaso because of her lawful acts in

investigating, reporting, and attempting to remedy and stop, the false claims and unlawful conduct

by the City of New Orleans and its officers and employees.

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37.

Villavaso is therefore entitled to all damages and other relief pursuant to 31 U.S.C.

§ 3730(h)(2), or other applicable law.

Count II. Retaliation – Louisiana Law.

38.

Villavaso re-avers and re-alleges the preceding allegations of this Complaint.

39.

At all times material hereto, Villavaso was an employee of the City of New Orleans entitled

to protection from retaliation and reprisal by the City of New Orleans and those acting on its behalf

pursuant to La. R.S. 23:967.

40.

Villavaso reported to the City’s officers and employees, both verbally and in writing, her

objection to and refusal to participate in the above-described acts and practices done in violation

of law.

41.

As set forth, the City of New Orleans discharged Villavaso because of her objection to and

refusal to participate in the above-described acts and practices done in violation of law.

42.

Villavaso is therefore entitled to all damages and other relief pursuant to La. R.S. 23:967.

Jury Demand

43.

Villavaso demands a trial by jury for all claims and issues so triable.

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Prayer for Relief

WHEREFORE, Complainant, Sunae Villavaso, prays that this Complaint be deemed

good and sufficient and that after due proceedings are had, judgment be rendered in her favor and

against the City of New Orleans for the following damages and relief:

A. All general and special damages suffered by Villavaso caused the City of New

Orleans’s retaliatory discharge of Villavaso, including damages for emotional and

mental anguish, outrage, anxiety, depression, humiliation, embarrassment, and loss

of enjoyment of life;.

B. Reinstatement of employment or front pay in lieu thereof, including wages and

benefits;

C. Two times the amount of back pay, including wages and all benefits, and including

interest on all back pay;

D. Punitive damages and exemplary damages;

E. All costs and attorney’s fees incurred in the prosecution of this matter;

F. Judicial interest, including interest on costs, to the full extent allowed by law;

G. All general and equitable relief that this Court deems to be just and proper under

the circumstances.

Respectfully submitted:

/s/ Kearney S. Loughlin

KEARNEY S. LOUGHLIN
La. State Bar No. 26391
6030 Prytania Street
New Orleans, Louisiana 70118
Telephone: (504) 891-3193
Facsimile: (504) 891-3195

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And by

NANAK S. RAI
La. State Bar No. 22852
3800 Nashville Avenue
New Orleans Louisiana 70125
Telephone: (504) 866-5275
Facsimile: (504) 861-4032
Attorneys for Sunae Villavaso

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