oversight

Grant Fraud

Published by the National Science Foundation, Office of Inspector General on 1995-10-31.

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

1




        "i
                                            NATIONAL SCIENCE FOUNDATION
                                             OFFICE OF INSPECTOR GENERAL
                                               OFFICE OF INVESTIGATIONS

                                   CLOSEOUT MEMORANDUM

    TO: AIGI      File Number: I95040014                                          Date: 17 March 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 conformance with standard closeout documents.

         Our office was informed that the subject' was alleged to have received duplicate travel
         reimbursements while employed at his institution2. The subject repaid $4,930.00 to his institution,
         and his institution returned the funds to the NSF grants. The subject also paid $20,000 in a civil
         settlement and agreed to limited debarment.

         Accordingly this case is closed.




         -
      Name:



    Signature &
       date:
                   Prepared by:
                  Agent:          Attorney:
                                                    Cleared by:
                                                   Supervisor:    AIGI
                           -   NATIONAL SCIENCE FOUNDATION
                                   4201 WILSON BOULEVARD
                                  ARLINGTON, VIRGINIA 22230

                                       3 1 October 1995


     OFFICE OF
 INSPECTOR GENERAL




          To:



                     '
                     Division of Contracts, Policy, and Oversight




                     -
                     Division of Grants and Agreements


                     General C   O U ~ S ~ ~


        From:
                     Acting Inspector General

      Subject:

 - 1                          has been Principal Investigator on many National Science
Foundation awards, most r e c e n t l m We investigated certain allegations
i n v o l v i n m and referred the matter to the United States Attorn
Eastern District of Virginia. A settlement has been reached between
Department of Justice. -paid
                                                                       &      Office for the
                                                                                   and the
                                         a civil penalty of $20,000.00 under the civil False
Claims Act. Certain conditions, specified in the agreement, are to be observed in
administering any current and future federal government awards in whic-                    is
involved. A copy of the agreement, with a cover letter from the Assistant United States
Attorney, is attached.

        Assuming that-              complies with the terms of the settlement agreement, this
office deems the matter closed, and we recommend that the National Science Foundation not
consider the alleged impropriety in connection with any future proposals or awards,

       Please call our Counsel, Dr. Montgomery K. Fisher, at 306-2100, if you have any
questions.



Attachment
O C T 2 7 '95 15:30   F R O M US R T T O R N E Y S O F F I C E               P A G E . 002

                                                 US. Department of Justice

                                                 United Statps Attorney
                                                 &tern Dirmmctof Viugrnaa




                                                 October 2 7 , 1995




          RE:

      ! -#
    Dear
         Enclosed is your fully executed copy of the Release and
    Settlement Agreement in this matter. The Whited S t a t e s .
    Department of Justice acknowledges full refmbvsement of t h e
    disputed funds and considers the matter closed.
         By copy of this letter to the National Science Foundation, I
    am advising that this matter should not affect any future grant
    proposals or avards as long as the protocol set forth in the
    Settlement Agreement is folloued.
                                   Sincerely,

                                   HELEN F. FAHEY
                                   UNITED STATES ATTORNEY




                                   B r i a n D . giller
                                   Assistant U n i t e d States Attorney
                                   ( 7 0 3 ) 706-3809




    cc:   National Science Foundation
.bcT 27 ' 9 5 15:30          F R O M US Q T T O R N E Y S OFFICE
        u




    -
              T h i s Release and Settlement Agreement ("Agreementu) is made

        and entered i n t o this         as-   i=l
                                                     day of October, 1995, by and between
        the UNITeD STATES O F - ~ R I C A("United S t a t e s n) , through the U n i t e d ,
        States Attorney for the Eastern District of V i r g i n i a ,


                                        W1'1P1688ET8:
              OQBPTttGAS,   after r e v i e w of extensive materials provided by the
        National Science Foundation, t h e Waited States believes that it has




    )
        travel reimbursement for trips paid from a National Science
        Poundatfon gramt; and
              )QBEREAS,

        Science




        amounting      to
                            after a review of materials provided by the National
                   Poundatfon
                            the United
                                       (including




                               $2,718.40
                                                         an    audit   prepared
                                           S t a t e s believes t h a t i t



                                                       allegedly
                                                                                     by   -
                                                                              is in e v e q a n e ' s
        b e s t interests to settle t h i s matter on the basis of four ( 4 ) trips
                                                in                     inappropriate        ttavel
        reimbursement claims; and
              WBEREAB, - )                                    denies that     any inaccurate or
        erroneous claims were made or w e r e knowingly false or made in
        deliberate ignorance or reckless disregard of the t r u t h or falsity
        of such claims for travel reimbursement, and asserts that any
        inaccurate or erroneous claims were in no way intentional, knowing
        or otherwise designed to defraud the National Science Foundation;
        and
              fJgEREAS,      in order to avoid further c i v i l litigation, and.
OCT,S7     '95 15:30     F R O M US A T T O R N E Y S O F F I C E                          P A G E . 004




     because the United States believes that it is in the public
     interest to settle any such disputes with regard to its claims, the
     United States and l                         '                  '
                                                                    have agreed t o settle a l l
     such claims and differences, and mattera relating thereto, by
     virtue of this Agreement; and
     -_-
            WHEREAS,      the     united       States        Justice Department       is     fully
     ompowered and authorized t o settle this matter for i t s e l f , the
     National Science ~oundatidn,and the United S t a t e s ,                     including a l l
     agencies thereof;




                                                                                 -
             HOW,    TEEREFORE, in considenation of t h e mutual cooenants                                 .


     expressed herein, the parties do hereby agree as follws:


             1.1    Pavmont to the Uaited S t a t e s a             U p o n the date of execution

     of t h i s settlement agreement by the U n i t e d States,
                   agrees that he will pay to the United States t h e eum of
     $20,000.00.

             1.2    Wanner and nethod of Pamuexat's                  The payment provided for
 -   in subparagraph 1.1 shall be made upon execution of this settlement
     agreement by both parties, by certified check, payable to the U. S.
     Department of Justice, 'deliveredto:
                          The united States Attorney's Office
                          1101 King street, S u i t e 5 0 2
                          Alexandria, V i r g i n i a 22314
                          Attn:  Brian D. Miller, E s q .
                                 Assistant United States Attorney



     submit proper claims for travel in the future, and will exercise
     reasonable care to provide proper checks and balances so t h a t such
~ C 27
    T    '95 15:31          F R O M US A T T O R N E Y S O F F I C E                       PRGE ,005




    future b i l l i n g s camply with all applicable regulations, including
    the f o l l w i n g :
    TEE P W I E Q COHDITIOES APP&Y TO AWARDS FROM AdfP lbG&?CY OF TEE
    FEDERAL w.WBERE APPROVALS BRE REQUIRBD BY B-CIES               OR
    AWAROEE. IHSTITUTIQNS, TBE RISTERCE OP l!EESE COBDITI ORS IlWLIES
    H-INQ   RSGARDXMG #BET-   OR HOT SUCH APPROPALS S E W BE GRANTED-
    1-     The C e p t e r


                   1,       Subject to agency award (including grant,




                   Center under                 subaward           front   an   awardee
                   institution-
                   2.   U n t i l July I, 1 9 9 7 , before the Center
                   enters into any subaward arrangement with an
                   awardee (or subawardee) institution,
                             s h a l l obtain a
                   the PI (if that ie not
                   authorized organizational
                   the avazdee (or aubavardee) i n s t i t u t i o n to
                   review and a rove a l l expenditures of federal
                   fvnda by                      ao the C e n t e r ;
                             shall forward a copy of this written
                   agreement to the Office of Inspector General
                   03 the National Science ~oundacion              beĀ£ore
                   the   Center         enters  into    the    subaward
                   arrangement.
                   3-   U n t i l July 1, 1997, subject to federal
                   rules concerning expenditures under federal
                   awards, all expenditures -yb                   or the
                   Center, under subaward to the Center fram an
                   awardee (or subawardee) institution, under any
                   federal award shall be reviewed and approved
                   by the PI (if that is not                   ) or the
                   authorized o r g a n i z a t i o n a l w a t i v e on
                   the a w a r d through the awardee (or subawardee)
                   institution.
           Be     Awards:
                   Before and after July 1, 1996,-may
                   receive   salary and expend                             funds   under
-   -

        O C T 27   '95 1 5 : 3 1   FROM US ATTORNEYS O F F I C E                       P Q G E . 006




                             subawards under t h e conditions set out i n "Au
                             above, or after July 1, 1996, but not before,
                             he may, subject t o usual agency proposal and
                             review procedures, apply for and receive
                             federal awards directly to the Center, with
                             the Center as avardee and                  as P I , '
                             if the Center meets usual aorements
                             for an avardee institution and, u n t i l July 1,
                             1997, prwided that a11 expenditures s h a l l be
                             reviewed and accounted for by a Certified
                             Public Accountant hired by the Center. The
                             costs   associated       with  the   review    of
                             expenditures      by    the   Certified    Public
                             Accountant s h a l l not be charged directly or
                             indfxectlp to the federal gwemmant-
                      C.    Audits:

                             Effective h e d i a t e l y , and for so long as t h e
                             Center, or any successor or campasable
                             corporation i n vhich                            is a
                             principal uwner, receives feder21 funds
                             dkectly              or     indirectly, an independent
                             Certified Public Accountant not associated
                             w i t h the Center s h a l l conduct an audit of t h e
                             coxpoxate books (including a ptoject cost
                             audit by individual award or agreement), i n
                             accordance w i t h generally accepted accounting
                             principles and federal audit requirements, a t
                             the end of each fiscal yeas i n which t h e
                             Centez reeeived any federal funds, with the
                             results being provided to the avardee
                             General of the National science ~oundation
                             The c o s t of the audit s h a l l not be charged
                                                                                  -
                             f n e t i t u t i o n ( s ) and the Office of Inspector

                             directly or indirectly to the federal
                             government. No audit is required in any,,year
                             in which the Center receives federal funds




                                            -
                             only via subavards and the total received is
                             less than $20,000.00.


                            P r i n c i ~ a lor Co-Principal Investicrator:
                             1.     Subject to usual agency approval
                             procedures,           ---may, if approved by
                             the agency at the awardee institution's
                             request :
                                   a.   become a PI or Co-PI on any
                                   existing award to an fnstitution
,bCT   27 ' 9 5   15:32    F R O M US R T T O R N E Y S O F F I C E

I




                            other than t h e Center, and
                            b.        apply, as P I or Co-PI for an
                            i n s t i t u t i o n other than the Center,
                            fox new funding.
                      2.      Until July 1, 1997,
                      becomes P I or Co-PI on
                      for an i n s t i t u t i o n other Ehaa the ~ e i t &and
                      other than the academic i n s t i t u t i o n that
                      employs him (which is covered by ' 8 " below),
                      he shall obtain a written agr-nt                  by the P I
                      ( i f that i s not                       ) or authorized
                      organizational rep-                       a t t h e awardee
                      institution t o review and approve all
                      expenditures of federal funds by
                                         s h a l l forward a
                     -eernent                     to t h e Office of Inspector
                     General of the National Science Foundation
                      before he becomes P I or Co-PZ on any a w a r d or
                     proposal.


                     1         Until July 1, 1997,
                     becomes emplayed by (orbefom3        acts
                     consultant. advisor, or subavardee for) an
                     i n s t i t u t i o n other than the Center, he s h a l l
                     eLther :
                           a.      notify the Office of Inspector
                           General of t h e National Science
                           Foundation, in writing, before he
                           becomes employed by the i n s t i t u t i o n ,
                           t h a t he w i l l neither apply for nor
                           receive, d i r e c t l y o r i n d i r e c t l y ,
                           federal              funds        through      the '
                            --
                           i n s t i t u t i o n until a f t e r July 1, 1997
                                or
                           b.    obtain a written agreement by
                            the    authorized    organizational
                            representative or chief financial
                            officer at the institution to review
                            and approve a l l expenditures of

                            forward a copy of t h i r w r i t t e n
                            agreement t o the Office of Inspector
                            General of t h e National Science
                            Foundation     before   he    becomes
                            employed     by                the        academic
                            institution.
, ~ C T 27   '95   15: 32        FROM U S QTTORNEYS OFF I C E




                           2.        U n t i l July 1, 1997, if.               is
                           employed by (or personally ap        -ad
                                                                  i
                           consultant, advisor, or subawardee for) an




                           -
                           i n s t i t u t i o n other than the Center, a l l
                           expenditures of federal funds by 0
                           shall be submitted for review and approval by
                           the authorized organizational representative
                           or chief financial o f f i c e r at t h e institution-
                           3-      Subject to usual agency approval




                                                                               -
                           procedures, any federal awards in vhich-
                                     has a financial iavolvement,    or
                           portions
                           -           thereof,  may,
                                                    -- at the   awardee
                           institution's request, be transferred to an
                           institution employing- .
                           4.      Subject to usual agency approval
                           procedures,
                                         w                may, if appraved by




                           -
                   .       t h e agency       t e awardee institution's
                           resuest, continue as or become PI or Co-PI on
                           any existing awards;                  m Y apply, as
                           PI or Co-PI for an --employing
                           0,        for new funding a t any tima.
              C,       Travel:
                           1.   ~ n t L l~ a n u a r y1, 2000, any travel by-
                                      paid in whole or in part, directly or
                           m d ~ r e c t l y ,with funda fzam a federal a w a r d or
                           awards (or aubaward (s) ) shall be undertaken
                           exclusively for the purpose of directly
                           furthering the objectives of the project(8)
                           funded   by   the   fedesal - award(s)     (or
                           aubawaxd(a)).    After January 1, 2000, the
                           usual rules and procedures w i l l be followed
                           for payment for 0      '     s travel w i t h
                           funds from federal awarda.



                       .
                           %leg,
                           2.   An       honoraria or other payments received
                                                       or any travel (or speech,
                                                     'or other activity associated
                           with the t r a v e l ) the expenses of which are
                           paid in whole or in nart, directly or
                           ~ n d f r e c t l y , with funda
                           (or subaward) for which
                           PI, or among the
                           remitted           pkomptly
                                                              -
                                                          to the awardee       (or
                           subavardee) institution and added to t h e funds
                           committed to the project by the f e d e r a l award
                           (or subavard) and used to further project
                           objectives.