oversight

Grant Fraud

Published by the National Science Foundation, Office of Inspector General on 1995-09-12.

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

11   TO: AIGl         ( File Number: I94020004                                    I   Date: 16 May 2002

     Subject: Closeout Memo                                                                   Page 1 of 1


           There was no closeout written at the time this case was closed. The following information was
           extracted from the file in conformancewith standard closeout documents.

           Our office was informed that the subject1was alleged to have diverted and misused grant funds. The
           subject pleaded guilty to one felony count, 18 USC 666. The subject was sentenced to 5 years
           probation, paid restitution in the amount of $140,247, and 500 hours of community service. The
           subject was debarred for two years.


11         The attached documents constitute the closeout for this case.




1          ' Frank A. Holmes

                        Prepared by:                  Cleared by:

                       Agent:          Attorney:    Supervisor:     AIGI
        Name:



      Signature &
         date:

           OIG-02-2
                           NATIONAL SCIENCE FOUNDATION
                               4201 WILSON BOULEVARD
                              ARLINGTON, VIRGINIA 22230




       OmCE OF THE
      DEPUTY DIRECTOR

    CERTIFIED MAIL-RETURN RECEIPT REQUESTED
    Frank A. Holmes, Jr.
    3586 Day Street
    San Diego, CA 92105
    Re:   Debarment
    Dear Mr. Holmes:
    On July 24, 1995, the National Science Foundation (NSF) sent you
s
    a Notice of Proposed Debarment in which NSF proposed to debar you
    from directly or indirectly obtaining the benefits of Federal
    research grants for a period of three years. The circumstances
    giving rise to your debarment are set forth in detail in the
    Notice of Proposed Debarment. Your debarment is based upon your
    criminal conviction for intentionally misapplying federal funds.
    On August. 24, 1995, NSF received your response to the proposed
    debarment. In your response, you request that NSF debar you for
    a period less than three years. In your letter, you state that
    you are now receiving counseling and acknowledge that you used
    poor judgment. In addition, you enclosed numerous letters
    attesting to your commitment to educating minority youth.
    You also enclosed a letter from Alana Wong, Assistant United
    States Attorney, stating that the basis of your guilty plea was
    that you misapplied government funds under your control for the
    benefit of other persons. In your defense, you state that you
    misapplied federal funds to assist an individual with AIDS. The
    administrative record, however, demonstrates that only a small
    portion of the misapplied funds were used to assist an individual
    with AIDS. In fact, the majority of the $140,247 of federal
    funds that you were ordered to pay in restitution were used for
    other unauthorized purposes.
    NSF believes that you still pose a substantial business risk to
    the Government. You exhibited extremely poor judgment and lack
    of honesty and integrity by misapplying federal funds. You
    improperly substituted your own personal judgment for the
    legitimate purposes of the grant, undermining the integrity of
    the grant process. Since my duty is to ensure that the
    Government is fully protected from reoccurrence of such offense,
    I find that you lack present responsibility and that debarment is
    still in the public interest.
Page Two
Frank A. Holmes, Jr.
Nonetheless, I find that the factors raised in your response,
taken together, mitigate the length of debarment (three years)
set forth in the Notice of Proposed Debarment. Accordingly, I
now conclude that your conduct warrants a two year debarment.
You will be debarred until July 24, 1997. The debarment shall be
effective throughout the Executive branch of the Federal
Government. You will be excluded during the period of debarment
from receiving Federal' financial and non-financial assistance and
benefits under nonprocurement Federal programs and activities
unless an agency head or an authorized designee makes a
determination to grant an exception in accordance with 45 CFR
8620.215.
NSF previously enclosed a copy of our debarment regulations with
theNotice of Proposed Debarment. If you have any questions
regarding the foregoing, pleasefeel free to contact Lawrence
Rudolph, General Counsel, at (703) 306-1060.




                             Anne C. Fetersen
                             Deputy Director
                MINUTES OF THE UNITED STATES DISTRICT COURT
                     SOUTHERN DISTRICT OF CALIFORNIA


HOW. JOHN S. RHOADES      CTRM DEP   C. SASSE      CT REPORTER MIND1 COLCHICO


         95-0165-R-CRIM          U.S.A.       VS      FRANK ANTHONY HOLMES, JR ( 1) (BOND)
     DISPOSITION                              MARY FRANKLIN      (1) (RET)
     INFO 1 CT                                AUSA:     ALANA WONG
     18 USC 666




     FILED-PLEA AGREEMENT. DEFENDANT WITHDRAWS NOT GUILTY PLEA AND                -
     PLEAS GUILTY TO COUNT 1 OF THE INFORMATION.
     COUNT 3    -
                PROBATION FOR 5 YEARS     -
                                       UNSUPERVISED. PENALTY ASSESSMENT
     $50.00.   NO FINE IMPOSED. RESTITUTION ORDERED IN THE AMOUNT OF
     $140,247.00 MINUS $87,361.00 AT A RATE TO BE DETERMINED BY THE
     PROBATION OFFICE TO BE PAID TO THE SAN DIEGO STATE UNIVERSITY
     FOUNDATION. APPEAL RIGHTS WAIVED.




                                                 CLERK, U.S. DISTRICT COURT
                                              SOUTIiERM GISTRIGT OF CALIFORNIA




DATED:     02-17-95                                               INITIALS :     w
                                                                                 DEPUTY
A.0.245 S Sheet 1 Judgment including Sentence Un
................................................                                   &d&m ~ f-------
                                                                                  ------------ orm'~ct
                               UNITED STATES DISTRICT C
                              SOUTHERN DISTRICT OF CALI
  UNITED STATES OF AMERICA                                           JUD

  FRANK ANTHONY HOLMES, JR. (1)                                      CASE NUMBER 95-0165-R-CRIMINAL


THE DEFENDANT
X Plead guilty to count(s)                0Nh OF THE INFORMATION                                      was
found guilty on count(n)                                                              after a
     plea of not guilty.
     Accordingly, the defendant is adjudged guilty of such count (s), which
involve the followinu offenses:
                         s

Title & Section              Nature of Offense                    Count ( s)
18 USC 666          MISAPPLICATION OF FEDERAL FUNDS                  1




                                                                 7


The defendant is sentenced as provided in pages 2 through 4 of this Judgment.
The sentence is imposed pursuant to the Sentence ~ e f o r m F o f1984.
    The defendant has been found not guilty on count(s)                     I

  and is discharued as to such count(s).
                   d                 . .
                                                (is)(are) dismissed on the
  motion of the United States.                                                I

     The Court determines that the defendant does not have the ability
to pay a fine.
    Pursuant to 18 USC 3013'an assessment is hereby levied in the axr.3unt of
    $ 50.00

    I is further ordered that the defendant shall notify the United States
Attorney for this district within 30 days of any change of residence or mailing
address until all fines, restitution, costs, and special assessments imposed by
this Judgment are fully paid.    .


Defendant's Attorney*
                        l hereby axest and certify
                        Ther t!!e foregoing
MARY FRANKLIN           copy d the or'ihd cn Ge in my o f f h srd in nly
SUITE 351               cvs tody
121 BROADWAY          CLERK, U.S. DISTRICT COURT
SAN DlXGO CA 92101 SOUTHERN DISTRICT OF CALI F O R M

                                                                              3
                                                                            Un ted States District Judge
A0 245 S Probation
_______-----_-------------------------------------------------------------
-__-_-----___-------------------------------d-------------------------------




DEFENDANT:        FRANK ANTHONY HOLMES, JR.                         JUDGEMENT PAGE 2   TO 4
CASE NUMBER:         95-0165-R



      The defendant .is hereby placed on probation for a term of FIVE (5) YEARS




    While on probation, the defendant'shall not commit another Federal, State,
or.local crime and shall comply with the standard conditions that have been
adopted by this court (set fofth on the following page). If this Judgment
imposes a fine or a restitution obligation, it shall be a condition of probation
that the defendant pay any such fine or restitution. The defendant shall
comply with the following additional conditions:
X    that you not possess any firearms, explosive devices, or other dangerous
weapons;
X      that you seek and maintain full-time employment; -
X    that you-                      500 hours of co&unity                 service as directed by the
Probation Officer;
X    that you provide complete disclosure of personal and business financial
records to the Probation Officer as requested.
A 0 245 S    RESTITUTION, FORFEITURE, OR OTHER PROVISIONS OF THE JUDGMENT
...........................................................................
............................................................................
DEFENDANT: FRANK ANTHONY HOLMES, JR.              JUDGMENT PAGE 3   OF 4
CASE NUMBER: 95-0165-R



                           RESTITUTION, FORFEITURE, OR
                        OTHER PROVISIONS OF THE JUDGMENT

     It is ordered that you pay restitution in the amount of $140,247.00 minus
$87,361.00 at a rate to be deterpined by the Probation Office to be paid to the
San Diego State University Foundation.
       s STANDARD CONDITIONS OF PROBATION/SUPERVISED RELEASE
AO 24:fi
-------------------------------------------------------------------------            I
-I-- -----------------------------------------------------------------------
Dm&ANT:     FRANK ANTHONY Bonas, JR.             JUDGMENT PAGE 4 OF   4
CASE {NUmER: 95-0165-R
         8       .
                                                                                     1
                                                                                     I
                                                                                     I

             i            STANDARD CONDITIONS OF SUPERVISION                         I
1) '$be defendant shall not commit another federal, state or local crime;                I


2) ?he defendant shall not leave the judicial district without the permission
     .of the court or probation officer;
                                                                                         1
3) the defendant shall report to the probation officer as directed by the court
    'Ior probation officer and shall submit a truthful and complete written report
    1 within the first five days of each month;
4 ) ?he defendant shall answer trpthfully all inquiries by the probation officer
     p d follow the instructions of the probation officer;
5)   .A"he defendant shall-suppart; his or -her dependents and meet other f 4 l y

G)
     d.esponsibilities;
        he defendant shall work regularly at a lawful occupation unless excused
      hg the probation office for schooling, training or other acceptable
                                                                                             I
                                                                                             1
                                                                                             I
      reasons;                                                                               I
7 ) The defendant shall notify the probation officer within seventy-two hours                I
      of any change in residence or employment;
8) The defendant shall refrain from excessive use of alcohol and shall not
      purchase, sue, distribute, or administer any narcotic or other controlled
      substance, or any paraphernalia related to such substances, except as
      prescribed by a physician;
9) The defendant shall not frequent-placeswhere controlled substances are -
      illegally sold, use, distributed, or administered;
10) 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 so by the probation officer;
11) 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 by the probation officer;
12) The defendant shall notify the probation officer within seventy-two hours
      of being arrested or questioned by a law enforcement officer;
13) The defendant shall not enter into any agreement to act as an informer or
      a special agent of law enforcement agency without the permission of the
      court;
14) 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 personal history or characteristics, and shall permit the probation
      officer to make such notifications and to confirm the defendant's compliance
     with such notification requirement.
         These conditions re in addition to any other conditions imposed by this
         court.
DATED :

          AfrAN Dm BERSIN
          United States Attorney



          Assistant U.S. Attorney
                              UNITED STATES DISTRICT COURT
                            SOUTHERN DISTRICT OF CALIPORNIA
                                                                         qs- I b P R
         UNITED STATES OP AMeRfCII,        1\    C r h h a l Case No.    *



                          Defendant.



              IT It3 HEREBY AGREE0 between the p l a i n t i f f . UNITED    m k    OF
                                                                                        I
1)
     I
     AHERICA,       fhrough it6 counsel, Alan 0.         Berein, united Itib.
         Attorneyr and Alana 24. Uong, AasiatAnt United 8tates          ~ t t ~ m e and
                                                                                    y,
                                                                                        I
                                              B , w i t h the advice and
         defendant, Frank Anthony H O ~ B L ~Jr.                              consent
         of Mnty A. Franklin. counsel for d e f - d ~ t , ' as.follows:
                                                                                          ..,. . ....*E+;i;
                                                                                                  -



3   1       inLore~at$oncharging defendant with:      ..  '   .
                                                               .  ..
                                                                     :.... %,.an
                 Pefendaht agresr t o waive 'indistrent urd plead .gyilfy
                                                                     ..
                                                                            t =:---..
                                                                              - - ....
                                                                               , .
                                                                                                C




                                                                          ..
        :     :
                  (.
                       while urAqent of an biganiratibii th.t
                       one y a w 'prfod,, in a c e * ..of 316,000
                                                                  - . .



                       grant, int.cntioaal ricrappl3sation.of
                       valued at $5,000 or.more, and that                         .
                       custody or control of such organiaation, between Suly 23,
                       1991 and October 33, 1991, within the Southerh Diutrlct -
                       of California, 'in violation of 18 U.S.C. S 666 (a) (1)(A)           .'
                       A* - -
                       Defendant understands that the offense to which defendaht is
        pleading guilty has the following elenentsr                                  ti
                              1..   ~efendthtwas an agent of an organization-;
    1                         2.   That the organization received benefits in ace36 of
                                                                               -..                  f

        $10,000             in the one-year period beginning January 1, 1991, pbrohnt
        to a federal pxogtarm involving a grant;.
                              3.    That the defendant intentionally misapplied property
        wbich had a value of more than $15000; and was under the care,
        custody and control o f cuch org&iration.
                              4     The defendant, with the intent to defraud, willfully
        took and misapplied said property for the use 'and benefit of
        himeelf or another.
                       8.                        bANDmlu!mED              -
                       Defendant has f u l l y discussed the fact'@ o f this case w i t h
        defense counsel. Defendant has committed each of the elements of
                    1.       8atvaen July .23,    .         1991, a. . . h ~atober 23, 1991,
                                                                          .

                                                                           .. .'.. : . . .i'.. . . .-z-'..
                                                                                      '.
                                                                                            ;
                                                                                                ' i

                                                                                                ir .

     defendant was an agent of the tan Diego stat. ~nivqtuiky'.8o~&dat&
                                                      ... ..s.... ...                  .. -. ..
                                                                                            <            . .
                                               . . -.   . ..-:?:      ..;     ,
                                                                               G'....,j< :;:.;:., j :-,. :.
                                                                             :,,.
                                                                                      .-?
                                                                                                                        .

     ( S ~ l g1;f B D $a ~a non-profit owmil&t$oi     &          i---.&   .'kwrilijiex.f&j
                                                                             !~~ a
                                           iqDSm
                                                   .
                                                      .              -:x'-y:pLw
                                                           .:.. .. ;, ,......
                                                                          ..:;.'+
                                                                 oh :malt *'C   ?- 4d.; .: ,..- .
                                                                                  .a
                                                                                  '
                                                                                  a
                                                                                                  '   ...I. :;
                                                                                                        ...?,wrgg
                                                                                                             ;



                        university;
     t b o ~ a ~ i t o i m iBot a t e
 7 university and adainistetr a l l non-state appropriated     mob;
                                                         , .." "

 8   includfng fedarcll &ant                aoniem.        The defendant ua8 the Pi(ij&f
                      Investigator in charge of three federal grants'
     ~irectot/~xincipal
     awarded to S D S m :
        -                         National Science Foundation (NSP) want                                b-
     8751352, California Postsecondary Xducation Comission (CPBC) grant
     n&r       677-6, and CPEC grant ntlaPber 233-5.
                    2.      During the one-year period begfnnJng January 1,
     1991, SO-           received benefits in excess of.$10,000 in federal fund6 -
     pursuant to NSF grant n-r                   8751552 and CPEC grants nuabers 677-6                                      1

     a d 223-5.
                    3.      Between July 23,               1991, and October 23,                          1991,
     defandant intentionally nisapplied $7922.62                         in federal grarit modes
     which were under the cuu,custody and control o f the SD-.                                                   Z
                                                                                                                 ' b.
     defendant, with the intent to defraud SDSUF, authoriged the
     iesuance oft payroll checks from NSF grant number 8751552, in tho
     t o b l amount of $3052.22;              payroll checks from CPEC grant number
     677-6, in the total amount of $1090.32;                        payroll checks from CPEC
     grant number        223-5   in the total amount of $1895.08; stipends chedke
     from NSF grant number 8751552, in the total amount of $1000.00; and
     otipend checks from CPEC grant number 223-5,                        i n the total amount of
     $885.00       The defendant vilfully authorired the issuance of the
2e                                                    3
 7               ~efendant
                  ..
                           underetande that the crime t o which defandant is
 8          pleading guilty cart.feu the tollowing penalties:

      II          1.   a maximum 10 years in prison; .                              I    '


      1           3.   .a matldatory special assessment of $50.00; and
                                                                                    I    i
                  4    a term of supervised release of not more than 3 years.
                                                                                    I
                                                                                    I1
a3
t 4               Defendant uderetande that fai-lureto comply with-any of the
1s    1 conditions       oi supervised release may r e ~ u l t in revocatiofi of
                                                                    .    .

      I11                                                                           Ii
                                                                             \.
I6          supervised release, requiring defendant to s&e      in prison all o t
a7          part of the tern of aupeviaed tolease.



20                Defendant underetands that t h i s guilty plea waives the right
3%          to:
22                1.   continue to plead not guilty and require the Government
23
      II to prove the elements of the crime beyond a reasonable dorlbt;
                                                                                    I
                   a epeedy and public trial by jury;
                  2.
                                                                                    I
2s    1)          1.
                  4.
                       tho assistance of counsel a t all stagas o i trialj
                       confront and crsse-examine adverse witnesses;
                                                                                    I
           plea;
13
                   2.    No   one has made any promicree o r offered any rewards i n
13
           return f o r t h i s g u i l t y plea, other than thosa c o c e i n e d i n thi.
14         .
           agteement;
1s
                   3,No one has threatened defendant o r dqf endant l o iaaiily to
16                                                                             .- 21        '
                                                                                                I f

           induce this g u i l t y plea; and                                      ..
17
                   4.    Defendant i c pleading    kiltybecawa in truth and i n fabt
18
19
      (1   defendant is guilty and for no othu reaaon.
                                                                                                      I

               -   This plea agreement i s limited t o the United S t a t e s ~ t i o r n e p e       (
a3    1) o t f i o e for southern Dictrict of C a l i i o n i r , anel 'caMot bind any I
                         the
24    I(o t h e r federal, c t a t e o r local proeecuting, a h i n i c t r a t i v e , or 1
25    1 regulatory authorities, although 6ovarnm.nt will bring tbie 1
                                                      the
'26   1 plea agreement t o the attention of other a u t h o r i t i e s if requested 1
           by the defendant.
                                                                                                  I
. .




           7   presentenbe report has been prepated by the 0.8. Probation off1
           8   and defense counsel'and t h e Govement have had an opportunity
           9   review and challenge the presentence report. Xn l i g h t of Che jof
       10      sentencing recommendations and calculations contained i n Section
       1       above, the partiem w i l l j o i n t l y requeclt immediate eantencin



       A4      lea. severe than the g&delines, up t o the maximum- in the gtatt,
       5       of conviction.
       16                                          vr11
       17                 NI-                     SOLE -ON           OP q
       16            This plea agreement is made pursuant t o Federal Rule a
       a9      criafnal Procedure     11(a) (1)(8)   .   Defendant unberrrtandu that
       20      eentence is within the sole discretion of the eehtcurcing judge
       3% 2he Government has not made and v i l l not mrake any representation a


       33      that the   sentencing judge may impose t h e maxhum sentence provide
       24      by s t a t u t e , an& i s also aware that any e s t b a t e 02 the probabl
       2s sentence by defense c~unsslis a prediction, mot a promise, and f
       a6 n o t bind- en    c a m . Likewise, the recommendation nade by t h
       a7
       a8                                            6
 -..
                       3        Category i#I.
                                                                                                    .:.
                                                                                                    .     _
                                                                                                          . - ,.-*.
                                                                                                          ,
                                                                                                       . -....
                                                                                                    ,.   . ..                       I
                                                                                   .   .    . .               . '. .
                       4-            E.   gOTNT-MO                                     8
                                                                                       -
                                                       . ..,:".. .
                                                                 ..'

                  . S                 he ~overnmentand the defendant will jointiy
              .    .

. .
      C   '
                       6        defendant be 6enteneed to a five' y e w tcul                                           .   .


                           I
                       7 probation, with the follwing special conditiov:
          1



                           I               1.   ~hat'th. defendant complete 500 hours of cmmtuj,ey
                                                                                                                               I
                   9

                  10 and
                           I
                                service, under circu~lstanceaapproved by the Probation Department;


                                          -2.   That the defendant make restitution to the SDSOP in
                                                                                                                               II
                  It
                           I the anount of      $240,211,            of which the defendant ha6 alrsady paid                   1


                  16
                           11
                                     In exchange for the Govarnmentl# conccs~ionr in thii plea
                                                                                                                               I
                  17
                           (1
                                agreement, defendant vaives any r i g h t to appeal or to collaterally
                                                                                                                               I
                  18 attack the aonviction and sentence.
                                                                                                                               I

                  aa 1(1 hasconualtted
                           . This agreement i c based on the understanding that defendant
                                        no criminal conduct eince defendant~sarrest on the
                                                                                            I
                  29
                      1 present charge., and that defendant will             no additional
                                                                                            I
                                                                                           commit
                  24
                      1
                      )I in or engages in additional criminal conduct during this period, I
                         criminal conduct before a&tenaing.    If the defendant ha. engaged
                  as
                  26                                                                                                           I
                                the Government will not be bound by the recommendations in this
                                                                                                                               I
        a
        4
        5
        6
                                          -      . kZ1

                  Thir plea agreement abodios the entire agreement betweiu, the
            parties and supersedes any 0th- agreement, witten o t oral.                         I

                                                                                                I

                                                                                                I
        7                                        XXII                                           l
        a               l a Q x E m m 0 ~ ~ BE
                                             - M.PJRICTINO                                      I
                                                                                                I
        9         No oaodification of t h i s plea agreement s h a l l be e f f e c t i v e     1
    l a unfeae i n writing aigned          by a l l parties.                                    I


    11                                           XfV                                            I



    12
    13            By signing t h i s agreement, defendant c e r t i f i e ~ ~ t h adefendant
                                                                                    t
    24. has read
    S
                       it.   Defendant has discussed-the term6 of t h i e a g r e m t
            w i t h defense counsel and f u l l y understands its meaning and e f f e c t .
                                                                                                    I
    16                                            xv
-   17

    18            Defendant is s a t i s f i e d , t h a t defense counsel has been competent
    9       and e f f e c t i v e i n representing defendant.
    20
    11
    22

    33
                                                         I

    24

    2s
    a6

    a7
    28                                             9
        Thin agreement comnencea and becones effective when t h e
partied named belov sign and date this document.

                                    W W D. BkRSIN
                                    United States Attorney
                           /

DATED
                                    Assistant U. 8 . Attorney




IN ADDITION TBg FORBGOING PROVISI0NS TO UHIQI X AGRZE, I
VNPER pmmm OP pxxrtmy mun ma PA^ n      t TEIE ~ A C ~ O B SmrsW
                                                            I
PARMWwR ABoVz ARB    mm.