Grant and Research Fraud

April 10, 2017

The Virginia Department of Social Services agreed to pay roughly $7.1 million to resolve allegations it violated the False Claims Act in its administration of the Supplemental Nutrition Assistance Program (SNAP). DOJ

March 23, 2017

American University of Beirut agreed to pay $700,000 to resolve allegations it violated the False Claims Act by providing material support to three entities that had been included on the U.S. Office of Foreign Assets Control’s (“OFAC”) Specially Designated Nationals and Blocked Persons List (the “SDN List”).  According to the government, the university provided material support to three SDN List entities by (1) providing specialized training on a variety of media topics, and (2) including one of the entities in a database on its public website to connect Non-Governmental Organizations with students and others interested in assisting them. DOJ (SDNY)

February 1, 2017

Jackson State University agreed to pay $1.17 million to settle charges it violated the False Claims act by mismanaging National Science Foundation grants.  Specifically, a 2012 NSF audit identified salary and non-salary expenditures by Jackson State that were unallowable, not allocable, and/or had insufficient, inadequate and/or no supporting documentation.  A subsequent NSF investigation determined that, in preparation for the audit, and subsequently in response to the preliminary audit findings, Jackson State fabricated time and effort reports and provided them to the auditors, and in some instances presented inadequate and/or no supporting documentation.  DOJ (SDMS)

August 29, 2016

The ringleader and two other defendants in the massive IWorks online billing scheme have agreed to settle FTC charges that they took more than $280 million from consumers via deceptive “trial” memberships for bogus government-grant and money-making products. In addition, the wife and parents of IWorks’ owner and CEO Jeremy Johnson have agreed to settle FTC charges that they received assets and funds as gifts from Johnson that came from the unlawful scheme. FTC

July 21, 2016

New Jersey filed an action against an Ocean County home improvement contracting company and two of its owners for allegedly taking more than $1.1 million from Superstorm Sandy victims – including over $898,000 in federal relief grants – and failing to begin or complete the contracted-for work. The Price Home Group Limited Liability Company of Manahawkin, and its owners Jonathan Price of Manahawkin, and Scott Cowan of Demarest, took significant initial payments to elevate or replace Sandy-damaged homes then failed to begin work, performed the work in a substandard manner and/or abandoned unfinished projects without returning for weeks, months, or at all, according to the state’s Complaint filed in Ocean County Superior Court. NJ

July 14, 2016

Columbia University agreed to pay $9.5 million to resolve charges it violated the False Claims Act for improperly seeking and receiving excessive cost recoveries in connection with research grants funded by the National Institutes of Health (NIH).  According to the government, Columbia impermissibly applied its “on-campus” indirect cost rate, instead of the much lower “off-campus” indirect cost rate, when seeking federal reimbursement for 423 NIH grants where the research was primarily performed at off-campus facilities owned and operated by the State of New York and New York City.  The government further alleged Columbia failed to disclose to NIH that it did not own or operate these facilities and that Columbia did not pay for use of the space for most of the relevant period.  The allegations originated with a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act.  The whistleblower will receive a yet-to-be-determined whistleblower award from the proceeds of the government's recovery.  DOJ (SDNY)

July 13, 2016

A Kentucky federal court entered a civil judgment of roughly $4.5 million against Vesta Brue and her medical device companies LifeTechniques, Inc. and Care Team Solutions LLC for violating the False Claims Act by making false statements that allowed them to receive millions of dollars in federal grants from the National Institutes of Health (NIH).  According to the settlement agreement, NIH awarded Brue and her companies five Small Business Innovation Research grants, worth millions of dollars, to support the development of electronic pillboxes customized for specific patient populations, including HIV and pediatric patients.  But Brue and her companies acknowledged that Brue spent the grant money on personal expenses, such as plastic surgery, jewelry, home renovations, and massages, among other expenses.  She also used grant money on business expenses not allowed under the grant regulations, such as costs associated with marketing and promoting her businesses.  DOJ (EDKY)

June 2, 2016

Aquatic Sensor Network Technology (Aquasent)and several of its officials and employees, namely Dr. Jun-Hong Cui, Dr. Yong Ma, Dr. Shengli Zhou, Dr. Zhijie Shi, and Juanjuan Liao, agreed to pay $400,000 to resolve allegations they violated the False Claims Act in the management of federally-funded grants awarded to Aquasent by the National Science Foundation.  DOJ (DCT)

March 9, 2016

New York-based Bard College agreed to pay $4 million to resolve allegations it violated the False Claims Act by receiving funds under the Department of Education’s Teacher Quality Partnership Grant Program despite failing to comply with the conditions of the grant.  The settlement also resolves allegations that Bard awarded, disbursed, and received Title IV student loan funds at campus locations before such locations were accredited or before providing notice of such locations to the Department of Education in violation of applicable regulations and Bard’s Title IV Program Participation Agreements with the agency.  The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by two former students of Bard’s Master of Arts in Teaching Program at Paramount Bard Academy in Delano, California.  They will receive a yet-to-be-determined whistleblower award from the proceeds of the government's recovery.  DOJ (EDCA)