NATIONAL SCIENCE FOUNDATION
OFFICE OF INSPECTOR GENERAL
OFFICE OF INVESTIGATIONS
CLOSEOUT MEMORANDUM
Case umber: I05100062 Page 1 of 1
On 26 October 2005, OIG was forwarded a news article concerning a federal indictment of the
president' and Vice president2 of a Pennsylvania cornpang for bank and wire fraud. The
accompanying email stated that this company had NSF SBIR Phase I awards in the past. An
investigation was initiated to determine if any of the monies awarded from the NSF grants4 were
affected by the fraudulent activities of the company's top officials.
OIG learned that the company officials filed false tax returns and loan applications to make the
business appear to more successful than it aciually was at the time. The company has filed
bankruptcy and dissolved all of its assets. -
After several months of negotiations, the President and VP for the company pled guilty to one count
each of fraudulent representation in connection with a loan application, in violation of 18 U.S.C 9
1014. According to the plea agreement, the defendants could receive a term not more than 30 years,
a fine of $1 million, a term of supervised released of (5) years and mandatory restitution.
Because there is no evidence that the President and VP misappropriatedNSF funds, no further action
is required. ~ccordingly,this case is closed.
I
2
NSF OIG Form 2 ( 1 1/02)
Grant Fraud
Published by the National Science Foundation, Office of Inspector General on 2006-10-13.
Below is a raw (and likely hideous) rendition of the original report. (PDF)