Grant and Research Fraud

December 21, 2022

Biotechnology companies iSense, LLC and Specific Diagnostics, Inc., together with their founder Paul Andrew Rhodes, will pay a total of $10.1 million to resolve allegations that they submitted false claims under grants from the DOD and HHS.  The government alleged that the firms improperly billed for costs incurred by another business, billed for compensation in excess of authorized federal limits, backdated services and cost-sharing agreements, and knowingly presented a backdated agreement to the government. USAO NDCal

October 21, 2021

Boulder, Colorado nonprofit The Center for Severe Weather Research paid $2.4 million to resolve allegations of fraud in federal grants received from the National Science Foundation, NASA, and NOAA.  CSWR was alleged to have improperly requested drawdowns from federal grants for expenses it had not incurred, and to have improperly retained interest accrued on federal funds received but not yet needed.  In addition, two CSWR principles, Ling Chan and Joshua Wurman, agreed to pay $203,776 to resolve allegations that they improperly obtained payments for ineligible expenses, including rental payment for CSWR offices in their personal residence.  USAO CO

September 21, 2021

The University of North Carolina at Chapel Hill (UNC-CH), East Carolina University (ECU), and the North Carolina Commission on Volunteerism and Community Service (NCCV), have agreed to pay a combined $842,500 to resolve allegations of fraud in connection with the AmeriCorps program.  An investigation by the United States had found that UNC-CH, ECU, and NCCV failed to comply with multiple grant requirements and regulations, including falsely certifying the service hours worked by AmeriCorps members, falsely certifying employee salaries required to administer the program, and failing to maintain proper internal controls.  USAO EDNC

September 1, 2021

The Van Andel Research Institute has agreed to pay $1.1 million to resolve allegations of failing to disclose foreign ties in awards granted by the National Institutes of Health (NIH), in violation of the False Claims Act.  The foreign ties included foreign-sourced research samples and funding by the Chinese government.  In December 2019, the institute settled similar claims for $5.5 million.  With this second settlement, specific conditions have now been imposed on the remainder of the institute’s NIH grants, including a requirement that an executive-level manager personally certify to disclosures until October 2022.  USAO WDMI

August 26, 2021

Nonprofit organization the Florida Coalition Against Domestic Violence, its former CEO Tiffany Carr, and other former officers and directors, have entered into a settlement agreement with the State of Florida to pay $5 million to resolve civil claims arising from the alleged misuse of state grant funds and excessive compensation to Carr.  The entity will be dissolved.  FL

June 8, 2021

A North-Carolina-based company, Bio-Adhesive Alliance, Inc., has been ordered to pay nearly $900,000 in restitution for making false statements on grant applications submitted to the Environmental Protection Agency and National Science Foundation.  The false statements about employee roles and eligibility were made to obtain nearly $1.4 million in multiple Small Business Innovative Research (SBIR) and Small Business Technology Transfer (STTR) Program grants.  USAO MDNC

May 12, 2021

Technology company MobileActive will pay $500,000, and its principal Katrin Verclas will serve two years in prison in civil and criminal resolutions arising from the defendants' scheme to defraud the U.S. State Department's Bureau of Democracy, Human Rights, and Labor ("DRL").  In 2010, MobileActive applied for and was awarded a $1.4 million DRL grant to develop and promote a "mobile security toolkit" for human rights organizations and activists to use in assessing and mitigating risks associated with mobile communications. After claiming $1.2 million in grant funds, Verclas failed to respond to requests for information from the State Department; she has admitted that she failed to comply with grant requirements, and directed the funds to her personal use while concealing the nature of the transactions from MobileActive's bank.  USAO MD