oversight

Intellectual Property Issues

Published by the National Science Foundation, Office of Inspector General on 2014-08-01.

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: 107090035                                                                     Page 1 of 1



         We initiated an investigation into the potential diversion of revenue from an NSF-funded center 1
         to a non-profit organization2 . The college grantee3 alleged that revenue from the sale of
         curriculum materials and conference fees had been diverted to the non-profit organization, which
         had been formed by the PI/Center Director4 and the Center Associate Director5 (Subjects).

         During the course of the investigation, we obtained, reviewed, and analyzed grant files, bank
         records, and accounting documentation. We interviewed NSF program officers and grants
         officials, grantee staff, members of the Center's oversight board, and members of affiliated
         organizations. We also reviewed the state court filings in the lawsuits between the college, non-
         profit organization, and the Subjects, and thoroughly researched intellectual property rights,
         copyright law, and NSF's program income rules.

         We discovered evidence that the Subjects, without the college's knowledge or consent, diverted
         program income that was supposed to be deposited into a college financial account to be used by
         the college to further grant purposes. Specifically, we determined that between January 2006 and
         April2010, the Subjects misappropriated and diverted $227,046 of program income, despite
         being fully aware of and comprehending NSF's program income rules. We also uncovered
         evidence of other ethically questionable if not wrongful activities engaged in by the Subjects.

         We referred.the matter to the USAO and after accepting the referral for further criminal
         investigation, the USAO ultimately declined to prosecute.

         Based on our recommendation, NSF suspended the Subjects and an affiliated companl
         government-wide during the pendency of a lawsuit. After the lawsuit settled, NSF agreed with
         our recommendation to debar the Subjects, the non-profit organization, and two affiliated
         companies 7 for five years.

                   Accordingly, this case is closed.




NSF OIG Form 2 (11102)