oversight

Grant Fraud Plagiarism (Verbatim)

Published by the National Science Foundation, Office of Inspector General on 2014-06-27.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                                          NATIONAL SCIENCE FOUNDATION
                                          OFFICE OF INSPECTOR GENERAL
                                            OFFICE OF INVESTIGATIONS

                                     CLOSEOUT MEMORANDUM

 Case Number: A09080070                                                        Page 1 of1


         We received an allegation of plagiarism regarding one of Subject 1's proposals
         submitted to NSF from a company he founded with Subject 2.              We found
         substantive plagiarism in that proposal, which was the basis for our
         recommendation for a finding of research misconduct. Additionally, that proposal
         was found to be duplicative of a proposal the company previously submitted to
         another federal agency and contains a misrepresentation of the company's facilities.
         In addition, we conclude the company inappropriately retained 4 7% of the awarded
         funds as profit through its misused NSF funds.          Based on the totality of
         wrongdoing, we recommended debarring the subjects and their company. NSF
         concurred, made a finding of research misconduct against Subject 1 and debarred
         Subject 1, Subject 2, and their company for 3 years. This memorandum, NSF's
         adjudication, and OIG's report of investigation comprise the closeout. This case is
         closed with no further action taken.




NSF OIG Form 2 (11/02)
Sensitive                                                                 Sensitive




                 National Science Foundation
                  Office of Inspector General




                       Report of Investigation
                      Case Number A09080070
                          March 27, 2013



                     This Report of Investigation is provided to you
                           FOR OFFICIAL USE ONLY.
 It contains protected personal information, the unauthorized disclosure of which
 may result in personal criminal liability under the Privacy Act, 5 U.S.C. § 552a.
 This report may be further disclosed within NSF only to individuals who must
 have knowledge of its contents to facilitate NSF's assessment and resolution of
 this matter. This report may be disclosed outside NSF only under the Freedom of
 Information and Privacy Acts, 5 U.S.C. §§ 552 & 552a. Please take appropriate
 precautions handling this report of investigation.
NSF OIG Form 22b (1113)
                                          SENSITIVE



                                 Executive Summary
       We are making recommendations under both the research misconduct
regulations (Part I) and the non-procurement suspension and debarment
regulations (Part II). Subject 1 and subject 2 co-founded a small business that
submitted six proposals to the federal government between 2006 and 2009. The
proposals the company submitted to NSF are at the center of the wrongdoing
discussed in this memo. One proposal was found to have substantive plagiarism,
which is the basis for our recommendation for a finding of research misconduct
(part I). Additionally, that proposal was found to be duplicative of a proposal the
company previously submitted to another federal agency and contains a
misrepresentation of the company's facilities. In addition, we conclude the company
n1isuscd f-JSF funds. Based on the totalityr of y-.:yrongdoi~g, ,~ve recommend debarring
the subjects and their company (part II). The subjects did not provide a written
response to our report, but subject 1 provided an oral response.


Background
       In 2004, while employed by a University (U1)1, subject 1 2 co-founded a
company 3 with another scientist (subject 2). 4 Subject 1 was the PI of two SBIR
proposals submitted to NSF by the company; both declined.5 Subject 2, whom we
later learned was married to subject 1, was the PI on three NSF proposals
submitted by the company, one of which was awarded. 6 Subject 2 was listed as the
company's Chief Technology Officer (CTO), the Authorized Organizational
Representative (AOR), and President for all five of the NSF proposals submitted by
the company. The company address is the subjects' home address.


Part I: Research Misconduct
      A. OIG's Inquiry and Investigation
      Inquiry
      We reviewed an allegation that one of the subject 1's NSF proposals (the
proposal)7 contained plagiarized material. Our review identified approximately 154




                                                                   . He was employed by Ul as a
p




                                                                                         It was
                                                                                          (p. 2)
                           , as a senior research scientist (p. 18 and p. 25).




                                               2
                                           SENSITIVE



lines of copied text and 1 copied figure from 8 source documents, s including 14
embedded citations. Subject 1 failed to reference six of the source documents, and
although he referenced two others, it was not in conjunction with the copied text.
None of the copied text was offset or distinguished in any way to enable a reader to
differentiate subject 1's own text and citations from the allegedly plagiarized text
and citations. In addition to the copied text, there was also one copied figure in the
proposal, figure 3. 9
         We wrote to subject 1 regarding the copied text, to which he responded:10
         I acknowledge that the citation and attribution to the use of some text
         in the documents should have been done more properly before the
         submission of the proposaL 11
      He claimed other language was so technically constrained that the text in the
source documents was used to better describe the concepts and ideas. ·However, he
did not provide the requested examples illustrating others' use of that same text.
He also failed to explain why Figure 3 in the proposal appeared to have been copied
without attribution. Further, subject 1 stated some of the proposal material was
prepared by a former company employee, 12 but declined to provide identifying or
contact information for this individuaL
       As a result of our Inquiry, we determined there was sufficient substance to
proceed to an Investigation. Because subject 1 worked for a small business that
lacks the resources to conduct an independent investigation, we conducted the
Investigation.13


         Investigation
      We wrote to subject 1 a second time seeking clarification and further
explanation_l 4 Subject 1 responded 15 that he did not want to involve any other
individuals in the investigation and again declined to name the former employee
who had contributed to the proposaL We note that even if the former employee had
written parts of proposal, that employee's contribution was not acknowledged; thus,
subject 1 would still have committed plagiarism because he submitted the work of
another as his own without giving appropriate credit. In his response, Subject 1
again failed to provide any support for his claim that there were technical


   8 The eight source documents (included in Tab 2) are seven publications (Source Documents A-G)
and a Wikipedia article (Source Document H).
   9 See Figure 3 in the proposal compared to Figure 1 in the - , et al. paper under Tab 2

(Source Document G (G4)).
    10 Tab 3 is our letter, and Tab 4 is subject l's response.

    11 Tab 4, p. 1.

   1z   Ibid.
   13   45 C.F.R. § 689.5(£).
   14   Tab 5.
   15   Tab 6.




                                                3
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constraints necessitating the use of certain language. Finally, with regard to Figure
3, subject 1 stated the figure in the proposal was not copied and provided three
articles containing sample figures to show similarity. 16 The top half of Figure 3 in
the proposal appears identical to the top half of the source figure. However, it
appears subject 1 made slight modifications to his figure to obfuscate this; i.e., he
relabeled the variables and the shape of a small section of the curve in the bottom
half. We concluded the figure in the proposal was based on and almost entirely
copied by subject 1, with only minor differences, without acknowledgment of
another author's figure _17
       We conclude the references subject 1 included did not pertain to the sections
of text he copied from the eight source documents. Instead, the subject simply
•   -.   ,    -.   ,-.     •,   ,•       -.       "'I       '   •       "'I    •,1"   ,-,       '   '   1       ·   1       I   1   11   1
1ncluctect the Citations atreaa.:y cont:a1nea. ':v1Ln1n Lne LexL ne cop1ea \emoeaueu
citations) and changed the reference numbers. Consequently, he failed to cite the
actual sources of the copied text. We reviewed three other NSF proposalslB
submitted by subject 1 for evidence of a pattern of copying, but found no evidence of
additional plagiarism.


             B. OIG's Assessment ofRM
                                                                    The Act
       Subject 1 copied approximately 154 lines of text, including 14 embedded
citations, from 8 different source documents in his NSF proposaL The proposal also
contained 1 figure substantially copied from another figure. Consequently, by
failing to appropriately distinguish verbatim copied text and a figure from his own
original text and figures, subject 1 presented the work of others as his own work
and failed to give appropriate credit to the actual authors, which is plagiarism.
                                                                Intent
       By subject 1's own admission, he failed to appropriately cite the text
originating in the source documents. Most of the source documents were not
referenced by subject 1, and the two that were, were not near the plagiarized text.
There were no quotations to distinguish the copied text from the subject's own text.
In three separate instances, consecutive embedded citations in the proposal
matched exactly with those of the source documents, further exhibiting subject 1's
intent to use others' work as his own. We do not find it feasible subject 1 could have


   16 See Figure 3 in the proposal compared to the highlighted source figures in Tab 2 (Source
Document B, (B3)) and Tab 6 (Source Documents I (Il), J (Jl, J2), and K (Kl)).
                   ~                 I                  I           ~




                         .rmll                •                         •                   •               •           •
                                                                              lmm
These proposals were declined.




                                                                    4
                                               SENSITIVE



copied this amount of unattributed text without knowing he was doing so.
Moreover, the subject's figure was almost entirely based on and copied from the
unacknowledged source figure; the fact that it was slightly altered by changing a
variable name indicates culpable intent. We therefore conclude subject 1 acted
knowingly when he copied text and the figure into his proposal.
                                    Significant Departure
       Based on the evidence and subject 1's responses, we conclude the
preponderance of evidence indicates subject 1 knowingly copied 154 lines of
unattributed text and one figure into his proposal without appropriately
distinguishing this text from his own work. In doing so, the subject significantly
departed from the accepted practice of his research community and NSF. A major
scientific publisher in the subject's field is clear regarding plagiarism stating:
"Plagiarism constitutes unethical scientific behavior and is never acceptable."l9
Accordingly, we conclude subject 1 plagiarized and, hence, committed research
misconduct.


      In deciding what actions are appropriate when making a finding of research
misconduct, NSF must consider several factors. These factors include how serious
the misconduct was; degree of intent; whether it was an isolated event or part of a
pattern; its impact on the research record; and other relevant circumstances. zo
                                              Seriousness
      As we noted above, we concluded the preponderance of evidence supports the
conclusion that subject 1 acted knowingly when he plagiarized material into his
proposal. Plagiarism violates research integrity and is a significant departure from
accepted practices in the research community. We conclude the amount of
plagiarized text is sufficiently serious to warrant a finding of research misconduct.
                                               Pattern
      As previously described, we examined three of subject 1's other NSF
proposals and did not find evidence to establish a pattern of plagiarism.
                               Impact on the Research Record
      The effect on the research record as a result of subject 1's actions was
minimal as the plagiarized text was part of a confidential proposal that was
declined funding.



   19 See   the   American   Institute   of    Physics'    "Publica1ion   and   authorship   practices"




                                                   5
                                               SENSITIVE




         C. Subject's Response
       The subject did not provide a written response to our draft report of
investigation, but made oral statements. He confirmed receipt of the report, but
said he is too sick to respond. 21 He did not address the substance of any of the
evidence or attempt to provide any further explanations. He was concerned about
the 3-year debarment, detailed in Part II of this report, because that will put the
company out of business. He wanted to know when the debarment starts, and if it
could be retroactive to 2009 or some earlier time. He doesn't know what he did
wrong, he has never had a situation like this in his career, but doesn't have time to
figure out the details; he understands we think he did something wrong. We did not
change our draft report or recommendations.


         D. OIG's Recommendation for the Research Misconduct
         Based on the evidence, OIG recommends NSF:
         •   Send subject 1 a letter of reprimand notifYing him that NSF has made a
             finding of research misconduct.22, 23
For a period of 3 years immediately following the debarment period (see part II):
         •   Bar Subject 1 from participating as a peer reviewer, advisor, or consultant
             for NSF. 24
         •   Require for each document (proposal, report, etc.), to which Subject 1
             contributes for submission to NSF, that Subject 1 submit a
             contemporaneous certification to the AlGI certifYing that the document
             does not contain plagiarism, falsification, or fabrication. 25




    21                                   , so his health is deteriorating.
    22 A Group I action 45 C.F.R. 689.3(a)(l)(i).
    23 We typically recommend the subject take an RCR course.            In this case, after receiving an
earlier draft of our report, subject 1 took an online RCR course and provided evidence he had done
so. Accordingly, we removed that recommendation.
    24 A Group III action 45 C.F.R. 689.3(a)(3)(ii).
    25 This action is similar to 45 C.F.R. 689.3(a)(l)(iii).




                                                    6
                                             SENSITIVE



Part II -Other Acts
       Generally, when we determine there is evidence of wrongdoing in an NSF
award or proposal, we will look at other proposals submitted by the PI or small
business. In this case, we reviewed all proposals the company submitted to NSF as
well as financial documents related to its funded NSF award. Ultimately, we
determined the company submitted a proposal to NSF that had previously been
submitted to another federal agency and failed to disclose this fact; made numerous
misstatements about it facilities in multiple proposals; and on its single, funded
NSF award, made misstatements about where and who would perform NSF-funded
activities. The company also made an excessive profit from the award that far
exceeded what NSF allows.
A. False certifications in the NSF Proposal
      While conducting the review of plagiarism in the NSF proposal26, we
determined that 5 months 27 prior to its submission to NSF; the company had
submitted a similar proposal to the Department of Energy (DOE).28 We concluded
the proposals were duplicative and, consequently, we examined the certifications
submitted with the NSF proposal. We discovered subject 2, as AOR and president,
had falsely certified that the proposal had not been submitted elsewhere on both the
proposal Cover Sheet29 and the separate SBIR certification. 30 Additionally, the
subjects failed to disclose the existence of the DOE submission on the Current and
Pending Support (CAPS) page of the NSF proposal. 31
B. False Statements in NSF Award
       We determined the company's awarded proposal (the award)3 2 contained false
statements concerning the facilities, the role of subject 2 (PI and AOR), and the role
of subject 1.




was                                                                   rese          99,617.
was the PI. Tab 7; common text between       two proposals is highlighted in green.
     29 The NSF cover sheet contains the questions "IS THIS PROPOSAL BEING SUBMITTED TO

ANOTHER FEDERAL AGENCY?" with boxes forr"YES" and "NO." The "NO" box is checked. Tab1,
p. 2.
     so SBIR Phase I- Proposal Cover Page: "The small business certifies that:" [question #4] "NSF is
the only Federal agency that has received this proposal (or overlapping or equivalent proposal) from
the small business concern. If No, you must disclose overlapping or equivalent proposals and awards
as required by this solicitation." The company indicated "Y." Tab 1, p.3.


                                         company Decem     3,
was awarded                            . The award period was
(following a no-cost extension).




                                                  7
                                                                             SENSITIVE



              i. Facilities
       We determined the company's address was the same as the subjects'
residence. Accordingly, we reviewed the claims made about facilities within the
award's proposal, which stated:




       Similar statements concerning the company's facilities also appear in both
the original and the revised budget: "The R&D efforts require access to the [U13 4]
r11-~---------            D~-~1~-'-~-~         ~---1     rTTOQ<;l    1\.T~--~.C~L--~-~-'-~---         D~-~1~-'-~--            l_ __   :_J __ r.._L_        ------------'-1
'_, H-~n r 1 r·l H n rl   J_,   o_CJJJ.t,Je~   c.u HJ.   Lt_J L.
                                                              vv J   .l_'l o_JIU.U:tu.ctca t:.n JJJ   ~-.,   G   t:J.U.LH~~   1 Jv..o.;r-u . ~s   l LJH~   ~   :! 1!' '1 1~   ''Y SJ
labs/centers."36 The company's address has consistently been that of the subjects'
residence, a condominium in a residential area, so it seemed unlikely that the
description of the facilities was accurate. 37
       We contacted subject 1 seeking clarification about the duplicative proposals
and the company's statements about facilities in the award.3S, 39 We also contacted
U1 and U2 to determine if the company had permission to use their facilities. We
learned the company had a legitimate contract with U2 and had sent a graduate
student/research assistant there to carry out experiments.            We subpoenaed
documents from U1 through which we learned U1 had received a whistleblower's
complaint concerning subject l's misuse of a U1laboratory and of student time. As
part of its investigation, 4 0 U1looked into the claims made on the company's website
about its facilities.
        U1's investigation report notes the description of the company's facilities on
its web site mirrored those of Ul. 41 The report concluded that by describing U1's
facilities as if they were company facilities, "[subject 1] violated University conflict
of interest policies by co-opting [U1's] property and identity for the benefit of his
company". 42 U1 concluded, "Although the amount of incremental loss could not be



      33 Tab 8, p. 20
      34 U1 is the                                         The subject was employed by U1 from 1999 to
2009, d ·                                           on     proposal and award.
     35 U2 is                      , located near the subjects' home.
     36 Tab 8, pp. 19, 29    mp       added].
     37 Subsequent proposals continued to use the same description of the company's facilities.      See
e.g., Tab 1, pp. 17-18.
     38 OIG's August 10, 2010 Letter to Subject is Tab 9.
     39 In his response, subject 1 indicated that he was too ill to respond to our questions; see Tab 10.
Consequently, we wrote to subject 2 (Tab 11); however, subject 1 responded (Tab 12).
     4 0 U1's Investigation report, dated January 15, 2009 is at Tab 13. Page numbers refer to the pdf

pagination.
     41 Tab 13, p. 5 (of pdf).
     42    Ibid.



                                                                                    8
                                                SENSITIVE



quantified, [subject 1] admittedly used both the Microlab and the Nanolab, under
the pretext of [U1] course instruction, for the benefit of [the company]." 43
        Based on the U1 report, we subpoenaed financial records from both the
company and its bank. In responding to our questions about U1's facilities, subject
1 admitted, "There was no contract between [U1] and [the company] for the NSF
award". 44 Nevertheless, records indicate $5,235.52 was charged to the NSF award
for use of U1's facilities. 45 Although award related work was performed at U1, the
company did not reimburse Ul. Subject 1 stated the approximately $5,236 was
transferred to the company's R&D account. 46 Due to his prior experience as a PI,
subject 1 knew his company did not have the requisite permission from U1 to use its
facilities at the time the awarded proposal was submitted, but included U1's
facilities in the NSF proposal anyway. 47 Furthermore, when the NSF program
officer (PO) requested a copy of the signed agreements pertaining to the use of U1's ·
and U2's facilities, 48 subject 2 stated the facilities "are open to industries with
moderate recharges and do not require any signed agreement to use."49 This
assertion was contradicted by subject 2's signature the next day on a contract with
U2 to use its facilities. 50 In addition, the subjects also knew from past experience
that U1 also required such a contract. 51
           ii. Subject 2/PI's Award-Related Work.
       NSF requires the PI of an SBIR Phase I award devote a mm1mum of a
calendar month to the project. 52 This requirement is specified by the award
solicitation 53 and incorporated by reference in the award letter. 54 None of the


    43   Id., p. 10.
    44  Tab 14 A, p. 1.
    45  Tab 14 B.
    46 Tab 14 C, #4; Tab 23.
    47 The proposal stated 'To carry out the state of the art proposed project, state-of-the-art

equipment facility in nanotechnology is needed. We will use the [U1] Research Laboratory and [U2]
Facility for the project. Both facilities are state-of-the-art cleanroom facilities open to industries with
modest charges on use of the cleanroom labs and equipment/instruments."
    48 The PO said he requests the contracts or agreements to ensure the rates are consistent with

the budget.
    4 9 Tab 15, April 30, 2007 email from subject 2 to the NSF program officer.
    50 See Tab 14 A, p. 4. She signed the U2 contract on May 1, 2007, the day after the April 30, 2007

email to the NSF program officer.
    5l See also Tab 13, pp. 2-3 discussing the previous contract with the company.
    52 "The primary employment of the Principal Ir,tvestigator (PI) must be with the small business

concern at the time of the award. A PI must spend a minimum of one calendar month of an SBIR
Phase I project." See NSF 06-958 at http://www.nsf.gov/pubs/2006/nsf06598/nsf06598.html
    53 Small Business Innovation Research and Small Business Technology Transfer Programs

Phase I Solicitation FY-2007, NSF 06-598. Tab 16, p. 3.
    54 Award letter: "This grant is awarded pursuant to the authority of the National Science

Foundation Act of 1950, as amended (42 U.S.C. 1861-75) and is subject to NSF Program Solicitation,
"Small Business Innovation Research and Small Business Technology Transfer Programs Phase I
Solicitation FY-2007, (NSF 06-598) and SBIR Phase I Grant General Conditions (11105)." Tab 17.




                                                     9
                                            SENSITIVE



documents provided by the company support the requisite level of effort by subject
2.
       The proposal states the work will be predominately performed at U1 and U2:
"There are no equipment and instrument purchases proposed. This is because a
great portion of the proposed efforts will be performed at [U1's] clean room and
[U2's] Nanofabrication Facilities."55 Our review of the evidence supports this
statement.      For example, subject 1 indicated to U1 officials during their
investigation that approximately half the research on the award occurred at Ul. 56
Based on the financial records, we know an undergraduate performed some of the
efforts at U1, 57 and another student under subject 1's supervision also performed
work using U1's facilities. 58 U2 invoices show that a graduate student/researcher

       After a complete review of the evidence provided, including U1's investigation
report, there is no evidence subject 2, the nominal PI, performed any of the
research. 60 Similarly, other than attend the NSF meeting, there is no evidence
subject 2 made any contribution to the NSF award, 61 nor is there any indication she
spent the requisite calendar month working on the project. However, the company
requested the initial payment of 2/3rds of the award, and never notified the PO of
subject 2's lack of involvement.
      In contrast, the final report submitted to NSF states that subject 2, the PI,
worked 160 hours on the award.6 2 We also know, through the general ledger, the
NSF award was charged $36,483 for subject 2's efforts. Although, we were told she
was not paid, rather her "salary was converted to [the company's] R &D reserve
account." 63
        iii. Role of Subject 1
      In addition to the misstatements about the facilities, the award proposal
states subject 1 is a PI with [U1]: "The [U1] Microfabrication Laboratory is a
cleanroom facility for teaching and research ... where [subject 1] is the Principal
Investigator since 1999." 64 The CV included with the proposal states subject 1 was
a Principle Investigator at U1's lab from May 1999-present.65 In fact, subject 1 had
a non-staff position as laboratory manager and had been the PI of a single DOD


   55   Tab 8, p. 29 (of pdf).
   56   Tab 13, p. 6 (of pdf).
    57 Tab 14 E.
    5s Tab 14 C.
    59 Tab 14 D.
    60 There is no mention of her doing work at U1's lab or any invoices from U2 showing that she
performed work at U2.
    6 1 Tab 14 F.
    62 Tab 18, p. 1.
    63 Tab 14 G.
    64 Tab 8, p 20, Section 3.6.
    65 Tab 8, p. 25.




                                                10
                                             SENSITIVE



award from 2004-2005,66 one that required written permission of Ul. Similarly, the
letter of support subject 1 wrote on U1 letterhead states the company is an
"industrial affiliate supporting the undergraduate research experiences program at
[U1]."67 However, there was no official connection between the company and U1,
and subject 1 was not a PI at the time of the company's proposal submission to NSF.
       When questioned by U1, Subject 1 initially denied having a company; he
referred to subject 2 as the company's cofounder, never informed U1 that Subject 2
was also his wife, and he attempted to distance himself from the company, claiming
he had nothing to do with [the company's] '"management' since May 2004".68 This
contradicts a different statement in which subject 1 admitted he directed some of
the students' independent projects toward areas of interest to the company. 69 In its
report, U1 determined "A lack of forthrightness pervaded [subject 1's] written and
oral statements with respect to [the company]." OIG found a similar lack of
forthrightness when dealing with the subject. Ultimately, U1 terminated the
subject 1 for misconduct in March 2009.70
C. Misuse of NSF Funds
      Subject 1 provided a general ledger and other supporting documentation;71
but did not initially address our question as to why the NSF award was charged
$5,325 for the use of Ul facilities when no corresponding payments were made to
Ul. 72 In response to our subpoena, the company stated a) NSF-related work was
performed at Ul by a former REU student under subjectl; b) analyses were done
and received with no invoice; c) the efforts on the NSF-related analyses were
charged to the award that the company is obligated to pay; and d) the money of the
charge was converted to the company's R&D reserve." 73 Thus, the company charged
work to NSF that was not invoiced to U1, and put the money in its R&D account,
instead of paying it to Ul.
      In a later response, subject 1, contradicting his subpoena response and
statements to U1, stated he did not actually use the U1 facility for his NSF



    66 In 2004, subject 1 had been allowed to serve as a PI on a DOD award, at which time U1 had
entered into a contract and agreed to let the company use its facilities solely for the 1 year the
company received the STTR award from Department of Defense. Tab 19
    6 7 Tab 8, p. 34
    68 Tab 13, p. 8
    69 Id., p. 7. With regard to other students whom the company paid, the report stated, "Despite

the compensation they receive from [the company], it is not known whether the students perceived
their grades might be at risk if ... they refused to work for [subject 1's] outside company, ... they
resigned [from] the company, . . . [or if] they questioned [subject 1's] use of [U1] laboratory
equipment, etc for the benefit of the company." Id., p. 9
    70 See Tab 20.

    n Tab 14, A-H.
    72 See Tabs 21-24, correspondence between NSF and subject 1.
    73 Tab 14 C. At the time of his response, subject 1 knew, based on the U1's Investigation report,

that he would not be invoiced for the use of U1's facilities because U1 could not quantify the damage.




                                                   11
                                                 SENSITIVE



research; 74 he now described that charge [the $5,235] as the amount of a recharge
for what the REU student 75 would have cost the company to reimburse Ul. Thus,
he considered it legitimate to transfer that money into the company's R&D account.
We note the company did not pay U1, so it is unclear why it was reasonable that the
cost of the student's free labor or the costs of the company's use of U1 facilities were
allocated to the NSF award and ultimately placed in the company's coffers. 7G
Ultimately, subject 1 returned $5,235.52 charged to NSF in direct costs for the use
of U1's lab, which, by his admission, was unallocable.77


OIG's Assessment


       The company submitted a proposal to NSF's SBIR program that was
substantially similar to a proposal it submitted to DOE-the technical approach,
technical objectives, and work plan from the DOE proposal are duplicated verbatim
(text and figures) in the NSF proposaL Subject 1, as the PI of the NSF proposal,
and subject 2, as the PI of the DOE proposal and AOR of both proposals, are both
responsible for this duplicate submission to NSF and obfuscation of its duplication.
Subject 2, as AOR, certified to NSF, in two places, that the proposal was not
submitted elsewhere; likewise subject 1 omitted listing the DOE proposal from the
NSF proposal's Current and Pending Support (CAPS) page. Thus, we conclude
subject 2 falsely certified that the proposal had not been submitted elsewhere on
both the proposal Cover Sheet and the separate SBIR certification. 78
             False Statements in Proposals
      The subjects submitted multiple proposals, one awarded, which falsely
claimed the company had four laboratories and the company could use facilities at
U1 to complete the research, 79 although the company has no facilities of its own.
Furthermore, during the period of its NSF award, the company had no agreement
with U1 for the use of U1's facilities. Indeed, U1 investigated the subject 1 for



    74 Subject 1 wrote, "[The company] did not actually use the [U1] Cleanroom for the NSF project
but a REU student under me at [U1] for research experiences. Therefore, there were no invoices
directly from the [U1] Cleanroom to [the company] but recharges to me at [U1] for undergraduate
research experiences through the NSF project, which were paid from the leftover money under the
[the company]/DOD project. The recharge summary reports are attached to you in this response as




      75--
attachment 3. The situation of the X-ray analysis for the NSF project is similar. The recharge,
however, was estimated. There were no invoice and no payment." Subject 1's Apr 2, 2012 response
atTa~

      76   Tab 24.
      77   The company returned the direct charge, but not the associated indirect cost and fee%. Tab
25.
      78   Tab 8, pp 2 & 3.
      79   See, for example, Tab 8, p. 20.




                                                    12
                                             SENSITIVE



unauthorized use of its facilities. The subjects misrepresented to NSF (and DOE)
both the company's own facilities and the company's access to others' facilities.
       In addition to the misstatements about the facilities, the letter of support and
CVs included in the proposals imply that subject 1 was a current PI with Ul. so
Furthermore, subject 1 used U1 letterhead to write a letter of support for his own
company.sl In that letter, :he incorrectly indicated that he was a current PI at U1
and that the company had special status as an "industrial affiliate" of Ul. Both the
use of the letterhead and the statements within the letter were designed to give a
false impression of an ongoing relationship between U1 and the company that
simply did not exist.
        False Statements in the Final Report
      The final project report states: "[U1] Microfabrication Laboratory under
[subject 1] provided us two undergraduates for integrated [topic] education research
experiences to participate in the research and development of the project."S2 From
the U1 investigation report, we know this is not accurate. Analogous with the
subjects' claims of facilities, it is true that subject 1 used students, but we agree
with U1, that subject 1's use of facilities and student time for his company's benefit
was unauthorized and inappropriate.
       The company provided no evidence to show subject 2 performed any research
on the award, much less the 160 hours that the final report claims. Nonetheless,
subject 2 signed both as PI and as authorized company officer the SBIR/STTR
Phase I Final Report Cover Page thereby agreeing to the statement: "I certify that
to the best of my knowledge the work for which payment is hereby requested was
performed in accordance with the award terms and conditions and that payment is
due and has not been previously requested."S3
        Financial Misconduct
      Per the NSF solicitation: "Reasonable fees (estimated profit) will be
considered under Phase I. The amount of the fee approved by NSF cannot exceed
seven percent (7%) of the total indirect and direct project costs."S 4 Based on our
review of the general ledger and other documents sent by the co~~believe
that the company's actual profit margin was 47% of the award, ~ of the
~ awarded. 85 Our calculations include the salary and fringe benefit rate of



   80   Tab 8, pp. 20 and 25.
   81   Id., p. 34.
    82 Tab 26, p. 2.
    83 Id., p. 4.
    84 Solicitation, section A.9.6. Budget; Tab 16, p. 15
    8 5 See table below. Calculations based on indirect cost and fee cost in approved NSF budget (see

Award letter Tab 17), general ledger (Tab 14 B) and notes on accounting system and record keeping
(Tab 14 II).




                                                  13
                                             SENSITIVE



subject 2, the unpaid undergraduate student, 86, 87 and the unpaid costs of U1's
laboratory, plus the indirect cost (54.5%) and fee cost (5%) associated with each. 88
We credited the company with the $5,235 of direct cost related to U1 facilities
returned to NSF. The items were charged against the NSF award and placed in the
company's R&D account:89
                                     Mischarges to NSF Award
(A) Item/GL        (B) Direct       (C)        (D) Direct   (E)           Total          Comment
Charge 90          Costs            Fringe     +Fringe      Indirect      (D)+ (E)
                                               (B+C)        (D*54%)
Subject 2 -PI      $18,891.4        $4,722.8 $23,689.6      $12,689.6     $36,483.9     Only
                  · 9 Salary    I   7 (25%) '"L>            3                           acL1v1Ly
                                                                                        documente
                                                                                        d was
                                                                                        attending
                                                                                        NSF
                                                                                        meeting 91
Undergrad          $3,000           $300      $3,300        $1,798.50     $5,098.50     Not paid
Student                             (10%)
                   Salary
UI facilities      $5,235.52                                                            $5,235
                                                                                        returned
                                                                                        to NSF
Total

Adjusted total                                                                          Deducting
                                                                                        amount
                                                                                        returned

Fee charged
(5%)
TOTAL                                                                                   47% of



                                                                                       -award



    86 Tab 14 B, the general ledger indicates that $3,000 was used to pay a student who worked on
the NSF award.
    8 7 Tab 14 E. The provided documentation states the student was never paid.
    88 See Tab 14 H.
    89 See Tab 14C (student); Tab 14 E (unpaid undergraduate student); and Tab 14 F (subject 2).
    90 The company submitted a general ledger in response to an NSF OIG subpoena.
    9l Subject 1 indicated that the portion of the award performed at U1 was done so by an
undergraduate student under Subject 1. A graduate student is listed on the invoices from U2.




                                                14
                                       SENSITIVE




      The company booked charges against the NSF award pertaining to subject 1,
an undergraduate student, and U1 facilities that it ne~. In spite of returning
$5,235, the company retained an excess profit of 47% - ) , w e l l in excess of the
7% to which NSF agreed.


Department of Justice Assessment
       Given the potential false certifications of the duplicative proposal and the
potential false statements in multiple proposals for the facilities, we contacted the
Department of Justice to inquire if it was interested in prosecution. It declined due
to the small harm to the government (the duplicative proposal was declined and the
low-dollar amount of the associated financial misconduct) and in lieu of
administrative action.


Debarment
   A. Grounds for Debarment
      NSF has the authority to debar an individual or entity for "[v]iolation of the
terms of a public agreement or transaction so serious as to affect the integrity of an
agency program .... " 92 Such a violation occurs when the individual or entity
commits a "willful violation of a statutory or regulatory provision or requirement
applicable to a public agreement or transaction .... " 93 Furthermore, NSF has the
authority to debar an individual or entity for "[a]ny other cause of so serious or
compelling a nature that it affects [the person's or entity's] present responsibility."94
       The subjects submitted duplicative, plagiarized proposals to DOE (subject 2
as PI) and NSF (subject 1 as PI) on behalf of the company. Subject 2, as AOR and
company president falsely certified that the duplicative proposal submitted to NSF
had not been submitted to any other federal agency. The subjects also submitted
another proposal, later awarded by NSF, which contained misstatements about the
company's facilities. Subject 1 also included a letter of support on U1 letterhead
indicting two REU students would work on the projects and U1labs would be used
for company work, and he would assign two students to work on the project.
Subject 1 had no authority to commit the resources of U1 or assign students, he was
later fired for these very acts.
      We determined subject 2 mislead the PO when stating that the company did
not need written contracts to use U1 or U2's facilities. Furthermore, when
responding to our subpoena, subject 1 provided a general ledger that charged the


   92   2 C.F.R. § 180.800 (b).
   93   2 C.F.R. § 180.800 (b)(3).
   94   2 C.F.R. § 180.800 (d).




                                            15
                                              SENSITIVE



costs of theU1 facilities and a student to the NSF award. We later learned the
company never paid for either the use of U1 facilities or the student. The company
also claimed in the final report that subject 2 worked over 160 hours, yet we can
find nothing to support this claim. Consequently, the salary, fringe benefits and
associated indirect and fee cost expended for subject 2, the student and the lab were
improperly charged against the NSF award. Because of the bad acts of subject 1
and subject 2, committed on behalf of their company, the company was able to
increase its profit margin from the agreed upon 5% to 4 7%, far exceeding the
maximum p~ofit of 7% permitted by the SBIR program.
      The subjects' actions constitute both "[v]iolation of the terms of a public
agreement or transaction so serious as to affect the integrity of an agency
program ... vv anci "willful violation of a statutory or regulatory prov1s1on or
requirement applicable to a public agreement or transaction .... " 96 Taken as a
whole, their actions cast serious doubt on the subjects' "present responsibility".9 7
       The company was owned by the subjects during the period at issue and is the
entity through which subjects submitted the proposals. The company is directly or
indirectly controlled by the subjects; the company's business address is the subjects'
home address. Thus, the company is an affiliate of the subjects, and the subjects
used the company to effectuate their actions. Further, the subjects' individual
actions may be imputed to the company because their actions occurred in connection
with their duties as Principal Investigators and Authorized Organizational
Representative for the company. Accordingly, we recommend both subjects and the
company be debarred.9S
                                          Burden of Proof
      In debarment actions, the burden of proof lies with NSF to demonstrate by a
preponderance of the evidence that cause for debarment exists.        Here, the
preponderance of the evidence amply demonstrates that the subjects violated the
trust NSF expects of Pis, AORs, and awardees, and the subjects lack present
responsibility to be considered viable research partners with NSF.
Relevant Factors
      The debarment regulation lists 19 factors that the debarring official may
consider. 99 Listed below are the factors pertinent to this case, and they are equally
relevant to the subjects and to the company:




    95 2 C.F.R. § 180.800 (b).
    96 2 C.F.R. § 180.800 (b)(3).
    97 2 C.F.R. § 180.800 (d).
    98 2 C.F.R. § 180.905 (definition of affiliate); 2 C.F.R. § 180.625 (scope of debarment may include
an affiliate); 2 C.F.R. § 180.630 (imputation of conduct permitted).
    99 2 C.F.R. § 180.860.




                                                   16
                                       SENSITIVE



   1. Actual or Potential Harm or ImpactlOO
      The harm to NSF is minimally ~-the unearned profit the company
improperly obtained from the NSF award, primarily for subject 2's unearned salary.
The company submitted substantially similar proposals, proposals containing
plagiarism, to both DOE and NSF. In addition to containing plagiarism, the
subjects falsely certified its originality to NSF, thereby depriving NSF of needed
information for the accurate and complete review of this proposal.
   2. Frequency of incidents/duration of wrongdoing.lOl
       The company misrepresented its facilities to NSF and DOE in six proposals
from 2006 through 2009. In addition, the subjects have misrepresented the nature
of their company since December 2006, when they submitted two proposals (one
funded) to NSF. Both proposals contained a cover letter and CV from subject 1
purporting to evince his experience as a PI at U1 and claiming the company, as an
industrial affiliate, had some sort of ongoing relationship with Ul. In truth, the
only link between the company and U1 was U1's employment of subject 1. Subject 1
was the PI on a single award with the University's permission. He had neither the
right nor permission to use U1's facilities or student time after the expiration of
that award-more than a year before the funded NSF proposal was submitted.
Furthermore, in a conflict-of-interest disclosure provided to U1, subject 1 disavowed
any role in the management of the company after 2004. U1 determined his actions
with regard to its facilities and students constituted a conflict of interests.
        The company, with subject 2 as PI, accepted an NSF award knowing they did
not have the proper permissions from U1 to do the work. In spite of the fact that
there was no feasible way for subject 2 to do the research required, the company
requested the initial payment of 2/3rds of the award. After the award ended, the
subjects submitted a final report for which subject 2 certified that the work had
been done in accordance with the terms and conditions of the awards; they did this
despite knowing they had not incurred charges for the use of the students or U1's
facilities, and that subject 2 had not worked for the requisite amount of time.
Nonetheless, they requested, and received, the final NSF payment.
   3. Pattern or Prior Historyl02
       Since 2006, the subjects have submitted five proposals to NSF in which they
claim the company has four laboratories and centers.I03 As mentioned in U1's
investigative report, subject 1 violated U1's conflict of interest policy.l04 In addition
to misuse of university resources and student time, subject 1 has, over time,
attempted to obscure his connection to the company. Subject 2 has acted as


   10o 2 C.F.R. §   180.860 (a).
   101 2 C.F.R. §   180.860 (b).
   102 2 C.F.R. §   180.860 (c).
   10 3 Tab 27.

   104 Tab 13, p.   5.




                                            17
                                            SENSITIVE



AOR/President and CTO of the company for all of the submitted proposals. Each of
the five proposals the company submitted to NSF over a period of 2.5 years
contained a misrepresentation of the company's facilities. Other than having
submitted practically the same plagiarized proposal to both NSF and DOE, we
found no pattern of plagiarism.
    4. Role in Wrongdoingl05
       The subjects have submitted five proposals to NSF through their company,
all of which contain false information about the company's facilities. Subject 2 had
been the AOR and company president on all of the proposals. She has also been the
PI on three. Subject 1 has been the PI on two NSF proposals and is responsible for
the misuse of Ul's facilities and student time. His behavior '.vas so egregious that
he was fired from U1 based on his actions. As founders and principles of the
company, the subjects are responsible for all of the wrongdoing we discovered.
Subjectl, as PI, is fully responsible for the plagiarism in his NSF proposal. Subject
2 as the PI of the proposal to the DOE, knew the proposal subject 1 submitted to
NSF was duplicative (because she had submitted substantially the same proposal to
DOE a few months prior), yet she twice certified (as AOR and president) that the
NSF proposal was not submitted elsewhere. Similarly both are responsible for the
omission from the CAPS page.
      Subject 2 submitted false certifications with the final report of the company's
NSF awards stating all the work had been done in accordance with the award's
terms and conditions. She was the PI and AOR of the grant to which she charged
NSF $5,235 for the use of U1's facilities and students, although no such payments
were made to Ul. When pressed on this matter, subject 1 repaid $5,235.
    5. Acceptance of Responsibility lOG
      Subject 1 initially blamed someone else for the plagiarism, but did not
provide the name of the allegedly responsible person. Although he conceded to some
inappropriate citations, he did not acknowledge he plagiarized.
        Subject 1 provided explanations for his submission of a duplicate proposal,
but failed to accept responsibility for the false certifications and omission of the
DOE proposal from the CAPS page. 107 With regard to the misrepresented facilities,
subject 1 provided a convoluted explanation about why he was allowed to use Ul's
facilities and REU students without its permission, so does not accept it was wrong
to do so. The U1 investigators noted: "At the conclusion of our interview, [subject 1]
stated the position that he did nothing wrong by utilizing [U1's] property and
students in the manner [he did]." 10s


    1os 2 C.F.R. § 180.860 (f).
    1o6 2 C.F.R. § 180.860 (g).
    107 We never received any statements from subject 2 because even when we wrote to subject 2,

subject 1 answered for her. See response# 9 (below) for Positions held by the subjects.   '
    10s Tab 13, p. 7.




                                               18
                                      SENSITIVE



      Subject 2 chose not respond to the letters we address to her, nor did she
respond to our subpoena, so we have no basis on which to judge her actions, other
than note she falsely certified to the originality of the NSF proposal and that the
work on the NSF award had been done in accordance with its terms and conditions.
      Subject 1 admitted the company did not pay U1 for use of U1's facilitates and
repaid NSF $5,235, although subject 2 was the PI and AOR of the grant, and
President of the company when it charged to the grant the unallocable expense.
   6. Repaymentl09
      When questioned about whether the $5,235.52, representing the charges for
the company's use of U1 facility was allocable, subject 1 returned that amount,
although he still tried to articulate why he thought the charge was justified.
However, he did not return the associated indirect costs or the fee (5%) associated
with the charge. The company has not been specifically asked about, nor has it
returned, the remainder of the funds that it misused.
   7. Fully cooperated with the government during the investigation no
        Although subjectl nominally cooperated, he did not fully cooperate. U1
determined his actions with regard to its facilities and students were wrong, and
the report indicated "a lack of forthrightness pervaded [subject 1's] written and oral
statements" .n1 We found a similar lack of forthrightness. He changed his
statements regarding the use of U1 facilities and students and provided varying
justifications for the company's decision to keep over to ~in funds from the
NSF award. Subject 2 did not respond to any of our questions; thus, we conclude
she did not cooperate.
   8. Pervasiveness ofWrongdoingll2
      The subjects are essentially the company-they own and operate it. Over a
course of 2.5 years, the subjects have consistently misstated the facilities on NSF
proposals, and misstated their affiliation with Ul. Both submitted proposals to
federal agencies containing plagiarized text.         Subject 2 falsely certified the
originality of a proposal submitted to NSF. Subject 1 improperly used the facilities
of U1 and failed to properly disclose his affiliation with the company to his employer
Ul. Therefore, the wrongdoing is pervasive.
   9. Positions Held by the Subjectsll3
      The subjects co-founded the company, owned it, and operated it. In fact, it
was run from their home. Subject 2 has been the AOR and president on all the
proposals to NSF, however she never responded to our inquires. Subject 1 appears


     2 C.F.R. §
   1os            180.860   (h).
   no2 C.F.R. §   180.860   (i).
   m Tab 13, p.   8.
   nz2 C.F.R. §   180.860   (j).
   m 2 C.F.R. §   180.860   (k).




                                           19
                                                                                    SENSITIVE



to have taken or control of the company since his dismissal from Ul, he alone has
responded to our correspondence, even those addressed to subject 2. Subject 1 also
responded to the subpoena issued to the company.
      As an employee of Ul, subject 1 exploited his university position for the
benefit of his company. He improperly used both facilities and students to do the
research required by the NSF award, because he admittedly pushed students to
work on areas of benefit to the company.
                   10. Effective Standards and Internal Controlsll4
       The company is a small business owned and operated by the subjects. As
such, there is no compliance officer or anyone to review the owners' decisions, so no
..;; ~..... 4-- --- ...... -....-_ ....-.   1 --- --- . . . . . +. ...,, --- l .,
_LU[,t:LUCU LV.l_L[,_LVH>.




Recommendation for Other Acts
     Based on the evidence, we recommend NSF debar both subjects and the
company for 3 years.n5




      2 C.F.R. § 180.860 (p).
               114
               115
      The subjects were sent a copy of this report, but only responded orally through subject 1. His
statements are summarized on p. 6.
                                  NATIONAL SCIENCE FOUNDATION
                                      4201 WILSON BOULEVARD
                                     ARLINGTON, VIRGINIA 22230



                                           -2014


    OFFICE OF THE
   DEPUTY DIRECTOR




CERTIFIED MAIL --RETURN RECEIPT REQUESTED




       Re:     Notice of Debarment


Dear Ms. •

0~, 2013, the National Science Foundation (NSF) issued you a Notice of
Debarment. This Notice proposed to debar you and your company,                                    ,
from directly or indirectly obtaining the benefits of Federal grants for a period of three years. As
reflected in the Notice, you and your company's proposed debarment was based on 1) false
certifications and statements you made to NSF, and 2) your misuse of NSF funds. In that Notice,
NSF provided you with thirty days to respond to the proposed debarment.

NSF did not receive a response from you within the subscribed period, and o~ 2014,
NSF sent you a Final Notice of Debarment. You subsequently informed NSF that, due to a
change of address, you never received the original Notice of Proposed Debarment. As such,
NSF re-sent the Notice of Proposed Debarment which you received via certified mail on
-2014.

Over thirty days have elapsed since you received the re-sent Notice of Proposed Debarment, and
NSF has not received a response from you or your company. Accordingly, you are debarred
until               2016.

Debarment precludes you and your company from receiving Federal financial and non-financial
assistance and benefits under non-procurement Federal programs and activities unless an agency
head or authorized designee makes a determination to grant an exception in accordance with 2
CFR 180.135. Non-procurement transactions include grants, cooperative agreements,
scholarships, fellowships, contracts of assistance, loans, loan guarantees, subsidies, insurance,
payments for specified use, and donation agreements.

In addition, you and your company are prohibited from receiving Federal contracts or approved
subcontracts under the Federal Acquisition Regulations at 48 CFR subpart 9.4 for the period of
                                                                                                 Page2
this debarment 2 CFR 180.925. During the debannent period, you may not have supervisory
responsibility, primary management, substantive control over, or critical influence on, a grant,
contract, or cooperative agreement with any agency of the Executive Branch of the Federal
Government

Should you have any questions about the foregoing, please contact
- a t (703) 292-8060.



                                                     Sincerely,

                                                     /~           ~     m                 ~

                                                     ~"----""' ~·-     &:tAJ\.A....t..-«::....
                                                     Cora B. Marrett
                                                     Deputy Director
                                 NATIONAL SCIENCE FOUNDATION
                                      4201 WILSON BOULEVARD
                                     ARLINGTON, VIRGINIA 22230




    OFFICE OF THE
   DEPUTY DIRECTOR




CERTIFIED MAIL --RETURN RECEIPT REQUESTED




       Re:     Notice of Debarment


DearDr..

0~2013, the National Science Foundation (NSF) issued you a Notice of Proposed
Debarment. This Notice proposed to debar you from directly or indirectly obtaining the benefits
of Federal grants for a period of three years. As reflected in the Notice, your proposed
debarment was based on 1) false certifications and statements you made to NSF, and 2) your
misuse of NSF funds. In that Notice, NSF provided you with thirty days to respond to the
proposed debarment.

NSF did not receive a response from you within the subscribed period, and o n - 2014,
NSF sent you a Final Notice of Debarment. You subsequently contacted NSF to inform us that,
due to a change of address, you never received the original Notice of Proposed Debarment As
such, NSF re-sent the Notice of Proposed Debarment which you received via certified mail on
-2014.

Over thirty days have elapsed since you received the re-sent Notice of Proposed Debarment, and
NSF has not received a response from you. Accordingly, you are debarred until
               2016.

Debarment precludes you from receiving Federal fmancial and non-fmancial assistance and
benefits under non-procurement Federal programs and activities unless an agency head or
authorized designee makes a determination to grant an exception in accordance with 2 CFR
180.135. Non-procurement transactions include grants, cooperative agreements, scholarships,
fellowships, contracts of assistance, loans, loan guarantees, subsidies, insurance, payments for
specified use, and donation agreements.

In addition, you are prohibited from receiving Federal contracts or approved subcontracts under
the Federal Acquisition Regulations at 48 CFR subpart 9.4 for the period of this debarment. 2
                                                                                           Page 2
CFR 180.925. During the debarment period, you may not have supervisory responsibility,
primary management, substantive control over, or critical influence on, a grant, contract, or
cooperative agreement with any agency of the Executive Branch of the Federal Government.

Please note that, in the Notice, NSF also took the following actions against you, which continue
to remain in effect:

   •   For three years from the end of your debarrnentperiod, you are required to submit
       certifications that any proposals or reports you submit to NSF do not contain plagiarized,
       falsified, or fabricated material; and
   •   You are prohibited from serving as an NSF reviewer, advisor, or consultant through
                    2016.

All cetiifications should be submitted in writing to NSF's OIG, Associate Inspector General for
Investigations, 4201 Wilson Boulevard, Arlington, VA 22230.

Should you have any questions about the foregoing, please contact
- ' at (703) 292-8060.


                                                    Sincerely,
                                 NATIONAL SCIENCE FOUNDATION
                                      4201 WILSON BOULEVARD
                                     ARLINGTON, VIRGINIA 22230




    OFFICE OF THE
   DEPUTY DIRECTOR
                                                                          Ill.

CERTIFIED MAIL --RETURN RECEIPT REQUESTED




       Re: Notice of Proposed Debarment


Dear Ms. •

In light of your misconduct, this letter serves as formal notice that the National Science
Foundation ("NSF") is proposing to debar you and                                 (the "Company")
from directly or indirectly obtaining the benefits of Federal grants for three years. During this
period of debarment, you and the Company will be precluded from receiving Federal fmancial
and non-financial assistance and benefits under non-procurement Federal programs and
activities. In addition, you and the Company will be prohibited from receiving any Federal
contracts or approved subcontracts under the Federal Acquisition Regulations ("'FAR"). Lastly,
during this debarment period, you and the Company will be barred from having supervisory
responsibility, primary management, substantive control over, or critical influence on, a grant,
contract, or cooperative agreement with any agency of the Executive Branch of the Federal
Government.


Reason for Debarment

NSF is proposing debarment against you and the Company based upon a referral from NSF's
Office oflnspector General ("OIG"). In accordance with the OIG's investigative report, you
served as the Authorized Organizational Representative ("AOR") and President of the Company
during the timeframe in which the Company submitted several proposals to NSF. You also
served as Principal Investigator on three of these proposals. A review of these proposals
demonstrates that you made false certifications and statements to NSF, and committed financial
misconduct.
Resulatory Basis for Debarment

Pursuant to 2 CFR 180.800, debarment may be imposed for:

(b) Violation of the terms of a public agreement or transaction so serious as to affect the integrity
of any agency program, such as-

(3) A willful violation of a statutory or regulatory provision or requirement applicable to a public
agreement or transaction; or

***
(d) Any other cause of so serious or compelling a nature that it affects your present
responsibility.

In any debarment action, the government must establish the cause for debarment by a
preponderance of the evidence. 2 CFR 180.850. Your misconduct, as set forth in theOIG's
inve~tigative report, supports a cause for debarment under 2 CFR 180.800(b)(3) and (d).
Moreover, your misconduct occurred in connection. with your performance of duties for or on
behalf of the Company, or with the Company's knowledge, approval, or acquiescence. Thus,
NSF may impute your conduct to the Company in accordance with the government-wide
debarment regulations. 2 CFR 180.630.


Length ofDebarment

Debarment must be for a period commensurate with the seriousness of the causes upon which an
individual's debarment is based. 2 CFR 180.865. Generally, a period of debarment should not
e?'-ceed three years but, where circumstances warrant, a longer period may be nnposed. Id
Having considered the seriousness of your actions, as well as the relevant aggravating and
mitigating factors set forth in 2 CFR 180.860, we are proposing debarment for a period of three
years.


Procedures Governing Proposed Debarment

The provisions of2 CFR Sections 180.800 through 180.885 govern debarment procedures and
decision-making. Under our regulations, you and the Company have 30 days after receipt of this
notice to submit, in person, or in writing, or through a representative, information and-argument
in opposition to this proposed debarment. 2 CFR180.815, 180.820. Comments submitted
within the 30-day period wilt:feccive full consideration and may lead to a revision of the
recommended disposition. IfNSF does not receive a response to this notice within the 30-day
period, this debarment will become final.
Any response you choose to submit should be addressed to Lawrence'Ru~ph, General Counsel,
National Science Foundation, Office of the General Counsel, 4201 Wilson Boulevard~ Room
1265, Arlington, Virginia, 22230. For your information, we are attaching a copy of the
Foundation's regulations on non-procurement debarment and FAR Subpart 9.4.




                                                Sincerely,
                                                             /    ./
                                             ?~f,t;JF•,;;>-1-'""'[/

                                                Fae Korsrno
                                                Senior Advisor


Enclosures:
OIG Investigative Report
Nonprocurement Debarment Regulations
FAR Regulations
_-
                                      NATIONAL SCIENCE FOUNDATION
                                          420i WILSON BOULEVARD
                                         ARLINGTON, VIRGINIA 22230 ,




        OFFICE OF THE
       DEPUTY DIRECTOR



     CERTJI<'IED MAIL -RETURN RECEIJ?T REQUESTED
                                                                            ••
                                                                        ~-t}j_
                                                                       jt) (!ti(lt.:u-:
                                                                     advJkJO {)/'--.


            Re: Notice of Proposed Debarment and Notice of Research Misconduct Determination

     Dear Dr. •

     You served as a Principal Investigator                   sal submitted for funding to the National
     Science Foundation ("NSF') entitled,
                    " As documented in the attached investigative report prepared by NSF's Office
                                          proposal contained plagiarized material. In addition, you co-
                                       . (the "Company"), which submitted four additional proposals
     to NSF. You served as PI on one of these proposals. A review of these proposals demonstrates
     that you made false statements to NSF, and committed fmancial misconduct.

     In light of your misconduct, this letter serves as formal notice that NSF is proposing to debar you
     from directly or indirectly obtaining the benefits of Federal grants for three years. During your
     period of debarment, you will be precluded from receiving Federal financial and non-financial
     assistance and benefits under non-procurement Federal programs and activities. In addition, you
     will be prohibited from receiving any Federal contracts or approved subcontracts under the
     Federal Acquisition Regulations ("FAR"). Lastly, during your debarment period, you will be
     barred from having supervisory responsibility, primary management, substantive control over, or
     critical influence on, a grant, contract, or cooperative agreement with any agency of the
     Executive Branch of the Federal Government.

     In addition to proposing your debarment, I am prohibiting you from serving as an NSF reviewer,
     advisor, or consultant to NSF u n t i l - 2016. Furthermore, for three years from the
     expiration of your debarment period, I am requiring that you submit certifications that any
     proposals or reports you submit to NSF do not contain plagiarized, falsified, or fabricated
     materiaL

     Research Misconduct and Administrative Actions other than Debarment

     Under NSF's regulations, "research misconduct" is defined as "fabrication, falsification, or
     plagiarism in proposing or performing research funded by NSF . :. •• 4 5 CFR § -689.1 (a)_ NSF
     defines "plagiarism" as "the appropriation of another person's ideas, processes, results or words
     without giving appropriate credit." 45 CPR§ 689.1(a)(3). A finding ofresearch mi"Sconduct
~-




                                                                                                  Page2
     requires that:

             (1) There be a significant departure from accepted practices of the relevant research
                 community; and
             (2) The research misconduct be committed intentionally, or knowingly, or recklessly;
                 and
             (3) The allegation be proven by a preponderance of evidence.

     45 CFR § 689.2(c).

     Your proposal contained 154 lines of copied text and one copied figure from eight sources. By
     subw1ttmg a proposal to NSF that copied the ideas or words of auotheJ without adequate
     attribution, as described in the OIG investigative report, you misrepresented someone else's
     work as your own. Your conduct unquestionably constitutes plagiarism. I therefore conclude
     that your actions meet the applicable definition of"research misconduct'' set forth :in NSF's
     regulations.

     Pursuant to NSF's regulations, the Foundation must also determine whether to make a finding of
     misconduct based on a preponderance of the evidence. 45 CFR § 689.2(c). After reviewing the
     Investigative Report, NSF has determined that, based on a preponderance of the evidence, your
     plagiarism was committed knowingly and constituted a significant departure from accepted
     practices of the relevant research community. I am, therefore, issuing a finding of research
     misconduct against you.

     NSF's regulations establish three categories of actions (Group I, I( and III) that can be taken in
     response to a finding of misconduct. 45 CFR § 689.3(a). Group I actions include issuing a letter
     of reprimand; conditioning awards on prior approval of particular activities from NSF; requiring
     that an institution or individual obtain special prior approval of particular activities from NSF;
     and requiring that an institutional representative certify as to the accuracy of reports or
     certifications of compliance with particular requirements. 45 CFR §689.3(a)(l). Group II
     actions include award suspension or restrictions on designated activities or expenditures;
     requiring special reviews of requests for funding; and requiring correction to the research record.
     45 CFR §689.3(a)(2). Group III actions include suspension or termination of awards;
     prohibitions on participation as NSF reviewers, advisors or consultants; and debarment or
     suspension from participation in NSF programs. 45 CFR § 689.3(a)(3).

     In determining the severity of the sanction to impose for research misconduct, I have considered
     the seriousness of the misconduct, and our determination that it was com.-·nitted lr..nowingly. I
     have also considered the fact that your misconduct was not an isolated incident. In addition, I
     have considered other relevant circumstances. 45 CFR § 689.3(b).

     After assessing the relevant facts and circumstances of this case, I am imposing the following
     actions on you:
                                                                                                 Page 3
   ..   For three years from the end of your debarment period,,you are required to submit
        certifications that any proposals or reports you submit to NSF do not contain plagiarized,
        falsified, or fabricated materiaL

   •    From the date of this letter t h r o u g h - 2016, you are prohibited from serving as
        an NSF reviewer, advisor, or consultant

All certifications should be submitted in writing to NSF's Office of Inspector General, Associate
Inspector General for Investigations, 4201 Wilson Boulevard, Arlington, Virginia 22230.


Debarment

As referenced previously, NSF is proposing debarment against you based upon a referral from
NSF's OIG. In accordance with the OIG's investigative report, you made false statements to
NSF and committed financial misconduct.

Regulatory Basis for Debarment

Pursuant to 2 CFR 180.800, debarment may be imposed for:

        (b) Violation of the terms of a public agreement or transaction so serious as to affect the
        integrity of any agency program, such as-

                (3) A willful violation of a statutory Q.I·X~gulatory provision or requirement
               applicable to a public agreement or transaction; or

               ***
        (d)    Any other cause of so serious or compelling a nature that it affects your present
               responsibility.

In any debarment action, the government must establish the cause for debarment by a
preponderance of the evidence. 2 CFR 180.850. Your misconduct, as set forth in the OIG's
investigative report; supports a cause for debarment under 2 CFR 180.800(b)(3) and (d).


Length of Debarment

Debarment must be for a period commensurate with the seriousness of the causes upon which an
individual's debarment is based. 2 CFR 180.865. Having considered the seriousness of your
actions, as well as the relevant aggravating and mitigating factors set forth in 2 CFR 180.860, I
am proposing your debarment for three years.
~~:~·:-­
.·~.r~·~




                                                                                                       Page4
           Appeal Procedures for Finding of Research Misconduct and Procedures Governing
           Proposed Debarment

           Appeal Procedures for Finding of Research Misconduct

           Under NSF's regulations, you have 30 days after receipt of this letter to submit an appeal of this
           finding, in writing,to the Director ofthe Foundation. 45 CFR 689.10(a). Any appeal should be
           addressed to the Director at the National Science Foundation, 4201 Wilson Boulevard,
           Arlington, Virginia 22230. If we do not receive your appeal within the 30-day period, the
           decision on the finding of research misconduct will become final. For your information, I am
           attaching a copy of the applicable regulations.
           ~     -.    .,..-..,   -   ...-..   ..   ..-...   T

           rroceaures 0overrzzng t'roposed 1Je!Jarnrer1t

           The provisions of2 CFR Sections 180.800 through 180.885 govern debarment procedures and
           decision-making. Under NSF regulations, you have 30 days after receipt of this notice to submit,
           in person or in writing, or through a representative, information and argument in opposition to
           this debarment. 2 CFR 180.820. Comments submitted within the 30-day period will receive full
           consideration and may lead to a revision of the recommended disposition. IfNSF does not
           receive a response to this notice within the 30-day period, this debarment will become finaL
           Any response should be addressed to Lawrence Rudolph, General Counsel, National Science
           Foundation, Office of the General Counsel, 4201 Wilson Boulevard, Room 1265, Arlington,
           Virginia 22230. For your information, we are attaching a copy of the Foundation's regulations
           on non-procurement debami.e:Ritttnd F ARSubpart 9A.

           Should you have any questions about the foregoing, please c o n t a c t - , Assistant
           General Counsel, at (703) 292-5054.


                                                                 Sincerely,




                                                                 Fae Korsmo
                                                                 Senior Advisor




           Enclosures:
           Investigative Report
           Nonprocurement Debarment Regulations
           FAR Regulations
           45 CFR Part 689