Theft of NSF Property

Published by the National Science Foundation, Office of Inspector General on 1997-03-25.

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

                                                 NATIONAL SCIENCE FOUNDATION
                                                     4201 WILSON BOULEVARD
                                                    ARLINGTON, VIRGINIA 22230

               OFFICE OF



                        March  .-   ..
                                             -                                  . --   -   -   -:---
                                                                                                   ..   ..   - ... -
         Date:                           ,
         To:            I9407003 1

         From:         ,-                         Special Agent
         Via:                                     Special Agent-

         Re :           Resolution of Case

         O n July 6, 1994, our office was informed by the Defense Criminal Investigative Service
                                                     NSF excess property screener employed by the
                                                                               b- fo
                                                   as being paid by the president
                                                    ain federal excess property under the guise of using
                                                    xcess property t c o r commercial resale. Based
         on this allegation, our office, DCIS, U.S. Air Force office <f Special Investigations (OSI),
         and the Federal Bureau of Investigations (FBI) opened a joint investigation.


         Initially, we reviewed and analyzed all SF-122 forms submitted to NSF by the University of

         w           from 1989 to the present. We determined that, since 1989, approximately
          11,78 ,086 worth of federal excess property has been transferred t o f o r use on 13
         different NSF grants. Nearly all of the transfer forms were signed by-              with the
         certification that the property was going to be used in conjunction with NSF grants and,
         then subsequently approved by the cognizant NSF program official. However, approximately
         65% of this property was transferred on three separate dates: Also, only 13% of this property
         appears o n l l p r o p e r t y records.

         Investigation Following Initial Analysis

         In September 1995, an investigation team made up of special agents from DCIS FBI OSI,
         and NSF 01G interviewed s e v e r a l r e s e a r c h e r s employees,               and
         employees of      The majority of these researchers stated that they had received federal
     excess property from-         but that the equipment was not in working order and therefore
     useless. These researchers stated that they sent this equipment back t o                 to
     dispose of it.

     During these                         admitted that he personally handled all federal excess
     property transfers to                 W p r o p e r t y disposal.        claimed that he did not
     obtain federal excess property with the intent to divert it to agy commercial entity and yet he
     refused to take a polygraph examination. He stated that the majority of the equipment he

     obtained for the        researchers was damaged and useless and was consequently sold at    a
     auction or d i s p o y o f through t h e m scrap contract. -property          management record
     were of little assistance because they listed but a small fraction of the actual urouertv received
     and disposed of ...by-
                                  ...         .

    a l s o admitted knowing the owner of b u t denied any financial or working
     relationship w i t h In addition, the investigation determined that             had the scrap
     contract with                 management office and that, in fact, this contract was awarded
                             she is an administrator withi-ffice).            Finally, it was shown
                   children had even worked a#as       part-time employees.

     Further investigation by OSI, DCIS, and.)      special agents consisted of, in part, interviews
     of witnesses who alleged that         had received cash and other items from the owner of
         and t h a ~ ~ c a s i o n apicked
                                     l l ~ up scrap property f r o m a t e at night. According to
     these special agents, these allegations have been unsibstantiated by any financial
     documentation obtained through grand jury subpoenas or subject admissions.


     Discussions with the U.S. Attorney's Office (USAO) for the
                    revealed that there were several problems in quantifying the amount of alleged
     material diverted t o m . In addition, the USAO has concluded that there is inadequate
     evidence s h o w i n g intent to create such a diversion and has requested that all
     agencies work on developing this aspect of the case.

     We have concluded that the critical element of this case is the ability of the investigation to
     completely trace specific items of equipment from t h e e to -,              through t h m
     property management system, and eventually t          o To-date, the invest~gationhas not been
     able to trace one piece of excess property in this manner. We also concluded that the
     evidence showing             alleged intent is weak and we do not anticipate new evidence
     surfacing that will make this aspect of the case stronger.

     Therefore, further use of NSF investigation resources is not warranted at this time. This case
     is closed.