oversight

Grant Fraud

Published by the National Science Foundation, Office of Inspector General on 2012-04-29.

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: 1-09080053                                                                    Page 1 of 1



                 We received a complaint from a NSF Program Officer claiming that a proposal was
                                                                                  2
         submitted to NSF by a Principal Investigator (PI/ through his company that was substantially
         similar to a proposal that had been previously awarded by NASA. NASA-OIG had initiated an
         investigation of the PI and we joined their ongoing investigation. After reviewing the NSF and
         NASA proposals, NSF declined to fund the proposal.

                 NASA-OIG and NSF-OIG conducted a joint investigation and found that the PI
         submitted false statements about his primary employment with his company and about the
         similarity of SBIR proposals submitted to NASA and NSF. The case was accepted for criminal
         prosecution by the Unites States Attorney's Office in the Southern District of Mississippi where
         NASA had issued SBIR payments to the company.

                On November 2, 2011, the PI plead guilty to Wire Fraud charges, 18 U.S.C. § 1343 and
         was ordered to pay $133,433.33 in fines and penalties, 3 years probation, and 100 hours of
                 •       •  3
         commumty service.

                On December 23, 2011, NASA issued a Notice of Proposed Debarment for 3 years to the
         PI and his company. Subsequently, on March 8, 2012, NASA debarred the PI and his company
         until December 22, 2014. 4


                   This case is closed with no further action taken.




         1
           Michael Pottenger.
         2
           SmartWear LLC.
         3
           Judgment is attached.
         4
           EPLS entry is attached.




NSF OIG Form 2 (11/02)
                    Case 1 :11-cr-000~ ---~G-RHW Document 28                                   Filed              Page 1 of 5
A0245B        (Rev. 09/08) Judgment in a Criminal C a s .
              Sheet 1



                                        UNITED STATES DISTRICT COURT
                                                        Southern District of Mississippi
                                                                           )
             UNITED STATES OF AMERICA                                      )      JUDGMENT IN A CRIMINAL CASE
                                  v.                                       )
               MICHAEL D. POTTENGER                                        )
                                                                                  Case Number:             1: 11 cr56WJG-RHW-1
                                                                           )
                                                                           )      USMNumber:               60949-112
                                                                           )
                                                                           )      Robert E. Hauberg, Jr.
                                                                                  Defendant's Attorney
THE DEFENDANT:
• pleaded guilty to count(s)        2 of the Indictment
D pleaded nolo contendere to count(s)
   which was accepted by the court.
D was found guilty on count(s)
   after a plea of not guilty.

The defendant is adjudicated guilty of these offenses:

Title & Section                   Nature of Offense                                                         Offense Ended
     18 U.S.C. § 1343             Wire Fraud                                                                   1124/2009




       The defendant is sentenced as provided in pages 2 through           _ ___.:5:__ of this judgment. The sentence is imposed pursuant to
the Sentencing Reform Act of 1984.
0 The defendant has been found not guilty on count(s)
• Count(s)                       1,3,4&5                    Dis   • are dismissed on the motion of the United States.
               ------~---------


         It is ordered that the defendant must notify the United States attorney for this district within 30 days of any change of name, residence,
or mailing address until all fines, restitution, costs, and special assessments imposed by this judgment are fully paid. If ordered to pay restitution,
the defenaant must notify the court and United States attorney of material changes in econormc circumstances.

                                                                          November 2, 2011
                                                                          Date of Imposition of Judgment




                                                                          Signature of Judge




                                                                          Walter J. Gex ill- United States Senior District Judge
                                                                          Name and Title of Judge


                                                                          November 2, 2011
                                                                          Date
A0245B
                        r.ase 1:11
               (Rev. 09/0'l!)"Judgment m a
                                                   -WJG-RHW Document 28                     Fi      1
                                                                                                        1/04/11    Page 2 of 5
               Sheet 4-Probation
                                                                                                             Judgment-Page _ _
                                                                                                                             2 _ of             5
DEFENDANT:                      POTTENGER, Michael D.
CASE NUMBER:                    l:llcr56WJG-RHW-1
                                                                  PROBATION
The defendant is hereby sentenced to probation for a term of :

Three years.




The defendant shall not commit another federal, state or local crime.
 The defendant shall not unlawfully possess a controlled substance. The defendant shall refrain from any unlawful use of a controlled
substance. The defendant shall submit to one drug test within 15 days of placement on probation and at least two periodic drug tests
thereafter, as determined by the court.
•         The above drug testing condition is suspended, based on the court's determination that the defendant poses a low risk of
          future substance abuse. (Check, if applicable.)

•         The defendant shall not possess a firearm, ammunition, destructive device, or any other dangerous weapon. (Check, if applicable.)

•
0
          The defendant shall cooperate in the collection of DNA as directed by the probation officer. (Check, if applicable.)
          The defendant shall comply with the requirements of the Sex Offender Registration and Notification Act (42 U.S.C. § 16901, et seq.)
          as directed by the proba1:J.on officer, the l3ureau of Prisons, or any state sex offender registration agency in which he or she resides,
          works, is a student, or was convicted of a qualifying offense. (Check, if applicable.)
0         The defendant shall participate in an approved program for domestic violence. (Check, if applicable.)
       If this judgment imposes a fme or restitution, it is a condition of probation that the defendant pay in accordance with the Schedule of
Payments sheet of this judgment.
          The defendant must comply with the standard conditions that have been adopted by this court as well as with any additional conditions
on the attached page.

                                             STANDARD CONDITIONS OF SUPERVISION
     1)    the defendant shall not leave the judicial district without the permission of the court or probation officer;
     2)    the defendant sball report to the probation officer and shall submit a truthful and complete written report within the first five days of
           each month;
     3)    the defendant shall answer truthfully all inquiries by the probation officer and follow the instructions of the probation officer;
     4)    the defendant shall support his or her dependents and meet other family responsibilities;
     5)    the defendant shflll work regularly at a lawful occupation, unless excused by the probation officer for schooling, training, or other
           acceptable reasons;
     6)    the defendant shall notify the probation officer at least ten days prior to any change in residence or employment;
     7)    the defendant shall refrain from excessive use of alcohol and shall not purchase, possess, use, distribute, or administer any controlled
           substance or any paraphernalia related to any controlled substances, except as prescribed by a physician;
     8)    the defendant shall not frequent places where controlled substances are illegally sold, used, distributed, or administered;
     9)    the defendant shall not associate with any persons engaged in criminal activity and shall not associate with any person convicted of a
           felony, unless granted permission to do sooy the probation officer;        .
    10)    the defendant shall permit a probation officer to visit him or her at any time at home or elsewhere and shall permit confiscation of any
           contraband observed in plain view of the probation officer;
    11)    the defendant shall notify the probation officer within seventy-two hours of being arrested or questioned by a law enforcement officer;
    12)    the defendant shall not enter into any agreement to act as an informer or a special agent of a law enforcement agency without the
           permission of the court; and
 13)       as directed by the probation officer, the defendant shall notify third parties of risks that may be occasioned by the defendant's criminal
           record or ,l?ersomil history or characteristics and shall permit the probation officer to make such notifications and to confirm the
           defendant s compliance with such notification requirement.                                            ·
A0245B    (Rev.   0J;6~9~Jblt'k~t-~~f"- ~G-RHW Document 28                 Filed .... , . 1 Page 3 of 5
          Sheet 4C- Probation            •
                                                                                         Judgment-Page _.=:..3_   of    5
DEFENDANT:              POTTENGER, Michael D.
CASE NUMBER:            1: llcr56WJG-RHW-1

                                  SPECIAL CONDITIONS OF SUPERVISION

1. Defendant shall provide the United States Probation Office [USPO] with access to any requested financial information.
2. Defendant shall not incur new credit charges or open additional lines of credit without the approval of the USPO unless
Defendant is in compliance with the installment payment schedule.                        .
3. Defendant shall complete 100 hours of community service work within the first year of supervision. Defendant shall
perform the community service work at specific times agreed upon with the approved community service agency and USPO.
Defendant is responsible for providing verification of completed hours to the USPO.
4. Defendant shall pay any restitution that is imposed by this Judgment.
                   r.RSB    1:11             ~-WJG-RHW          Document 28                Fi   '~1/04/11    Page 4 of 5
A0245B    (Rev. 09/(Jg)'Juugment m
          Sheet 5 - Criminal
                                                                                                   Judgment- Page _ _,_4_ _   of        5
DEFENDANT:                           POTTENGER, Michael D.
CASE NUMBER:                         l:llcr56WJG-RHW-1
                                            CRIM:INAL MONETARY PENALTIES
    The defendant must pay the total criminal monetary penalties under the schedule of payments on Sheet 6.


                     Assessment                                      Fine                                Restitution
TOTALS            $ 100.00                                         $ waived                           $ 133,333.33


D The determination of restitution is deferred until - - -.        An Amended Judgment in a Criminal Case (AO 245C) will be entered
    after such determination.

D The defendant must make restitution (including community restitution) to the following payees in the amount listed below.

    If the defendant makes a partial payment, each payee shall receive an approximately proportioned payment, unless specified otherwise in
    the priority order or percentage payment column below. However, pursuant to 18 U:S.C. § 3664(1), all nonfederal victims must be paid
    before the United States is pmd.

Name of Payee                               Total Loss*                        Restitution Ordered                 Priority or Percentage
NSSC-FMD Accounts                                                                           133,333.33
Receivable
Attn: For the Account of
Headquarters of Chief Engineer
Building 1111, C Road
Stennis Space Center 39539




TOTALS                                 $_ _ _ _ _ _ __                   $ _ _ _ _-=13=3=,3=33=·=33~


D    Restitution amount ordered pursuant to plea agreement $
                                                                    -------~----



D    The defendant must pay interest on restitution and a fine of more than $2,500, unless the restitution or fine is paid in full before the
     fifteenth day after the date of the judgment, pursuant to 18 U.S.C. § 3612(f). All of the payment options on Sheet 6 may be subject
     to penalties for delinquency and default, pursuant to 18 U.S.C. § 3612(g).

•    The court determined that the defendant does not have the ability to pay interest and it is ordered that:

     •    the interest requirement is waived for the      D fine     •      restitution.

     D the interest requirement for the       D fine       D restitution is modified as follows:


* Findings for the total amount oflosses are required under Chapters109A, 110, 11 OA, and 113A of Title 18 for offenses committed on or after
September 13, 1994, but before Apri123, 1996.
A0245B
                   r.::~sP.   1·11-Er:-OQOJ::q_
          (Rev. 09/0"S)'"Juagmerlt m a rirmnatf
                                                           RHW Document 28                   Filed .. 1              Page 5 of 5
          Sheet 6 - Schedule of Payments

                                                                                                              Judgment- Page -=-5_ _ of                5
DEFENDANT:                    POTTENGER, Michael D.
CASE NUMBER:                  1:11 cr56WJG-RHW-1

                                                     SCHEDULE OF PAYMENTS

Having assessed the defendant's ability to pay, payment of the total criminal monetary penalties is due as follows:

A    •    Lump sum payment of$                133,433.33       due immediately, balance due

          D     not later than                                  , or
          •     in accordance           D C,      D D,        D E, or          •   Fbelow; or

B    D Payment to begin immediately (may be combined with                   oc,          D D, or      D F below); or
C    D    Payment in equal                          (e.g., weekly, monthly, quarterly) installments of $                            over a period of
                          (e.g., months or years), to commence                       (e.g., 30 or 60 days) after the date of this judgment; or

D    D Payment in equal                             (e.g., weekly, monthly, quarterly) installments of $                         over a period of
                          (e.g., months or years), to commence                       (e.g., 30 or 60 days) after release from imprisonment to a
          term of supervision; or

E    D Payment during the term of supervised release will commence within                     (e.g., 30 or 60 days) after release from
          imprisonment. The court will set the payment plan based on an assessment of the defendant's ability to pay at that time; or

F    •    Special instructions regarding the payment of criminal monetary penalties:
          Special assessment and restitution due immediately, with any unpaid balance payable at tb.e rate of not less than $500 per month,
          With the frrst payment becoming within 30 days after sentencing. In ordering monthly payments, the court acknowledges
          Defendant does not have the present ability to pay restitution in full during his period of probation. Prior to discharge from
          supervision, Defendant shall make satisfactory arrangement for the payment otany balance outstanding on this restitution with the
          United States Financial Litigation Unit and the United States Probation Office.


Unless the court has expressly ordered otherwise, if this judgment imposes imprisonment, payment of criminal monet~ penalties is due during .
imprisonment. All cruninal monetary penalties, except those payments made through the Federal Bureau of Pnsons' Inmate Financial
Responsibility Program, are made to the clerk of the court.

The defendant shall receive credit for all payments previously made toward any criminal monetary penalties imposed.




D    Joint and Several    1



     Defendant and Co-Defendant Names and Case Numbers (including defendant number), Total Amount, Joint and Several Amount,
     and corresponding payee, if appropriate.




D    The defendant shall pay the cost of prosecution.

D    The defendant shall pay the following court cost(s):

D    The defendant shall forfeit the defendant's interest in the following property to the United States:




Payments shall be applied in the following order: (1) assessment, (2) restitution principal, (3) restitution interest, (4) fme principal,
(5) fine interest, (6) community restitution, (7) penalties, and (8) costs, including cost of prosecution and court costs.
Excluded Parties List Syst"'m                                                                                                            Page 1 of 1



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                                                Name                  Pottenger, Michael D, Mr.
                                                Classification        Individual
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                                           . CT Action(s) --                                                              > Multiple Names
 OFFICIAL GOVERNMENT USE ONLY                       Action Date       23-Dec-2011                                         > Recent Updates
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   > Debar Maintenance                                 CT Code        A1
                                                        Agency        NASA
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   > Upload Login                             EPLS Create Date        23-Dec-2011
                                              EPLS Modify Date        04-Jan-2012                                         > For Help: Federal Service Desk

                                                      Action Date     08-Mar-2012
                                                 Termination Date     22-Dec-2014
                                                        CTCode        A
                                                          Agency      NASA
                                                     Agency POC       NASA Contacts
                                                 EPLS Create Date     08-Mar-2012
                                                 EPLS Modify Date


                                            • Cross Reference(s) -
                                                                                    Action                   CT
                                           ·•        Name                                   Term Date
                                                                                     Date                   Code
                                                   1.SMARTWEAR, LLC                 23-Dec-   lndef.         A1
                                                     (Primary Record)                2011
                                                                                    08-Mar-  22-Dec-          A
                                                                                     2012      2014


                                                                          Record History


                                                                            Page:   1



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