The United States Government awards more than $500 billion in annual grants and state governments award billions more on top of that. These grants support infrastructure projects, invest in healthcare, fund university research, and make public art more sustainable. These grants are also susceptible to fraud. Fraudulently obtaining or executing a federal grant can run afoul of the False Claims Act, and doing the same under a state grant can result in violating the various state False Claims Acts.
Generally, the False Claims Act allows private persons, known as relators, to bring what is called a qui tam lawsuit on the government’s behalf, with the promise of a potential reward of a portion of the government’s recovery (between 15% and 30%). Thanks to the law, the government annually recovers billions of dollars.
Perpetrators of grant fraud can include various universities, hospitals, research institutes.
Varieties of fraud found in government grants include:
- Providing false information on a grant application to obtain a grant, which can include lying about the purpose of a grant or falsely certifying the grantee follows all applicable laws;
- Falsifying the existence or results of grant-funded activities such as scientific experiments. This can include falsifying data that results from experiments or plainly fabricating the fact that studies happened at all;
- Charging inflated labor costs or exaggerating the hours worked associated with grant-funded projects and initiatives;
- Allocating grant-funds to use for unrelated purposes or shifting costs between grant-funded and non-grant-funded programs;
- Embezzlement of grant-funds or charging personal expenses as business expenses against the grant;
- Billing more than one grant for the same work;
- Paying bribes or kickbacks to help obtain a grant;
- Misrepresenting the status of a project to continue receiving government funds.
One of the largest settlements resulting from grant fraud was with Duke University in 2019. The university paid $112.5M to settle charges in violating the False Claims Act by submitting falsified research on federal grants from the National Institutes of Health and Environmental Protection Agency. The allegations were brought forward by a whistleblower who received an award of over $33M.
These are just some examples of ways that government grants might be defrauded. Without insiders and whistleblowers exposing fraud, most would go undetected. If you would like more information, or would like to speak to a member of the Constantine Cannon’s whistleblower lawyer team, please Contact us for a Confidential Consultation.