oversight

Grant Fraud

Published by the National Science Foundation, Office of Inspector General on 1997-03-20.

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

          I




                                   OFFICE OF INSPECTOR GENERAL
                                     OFFICE OF INVESTIGATIONS

                          CLOSEOUT MEMORANDUM




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 committed embezzlement, theft or
diversion of grant funds. During a routine audit, NSF OIG discovered that the subject had received
payment for a duplicate travel reimbursement submitted to both the university2 and a society.3
Further investigation revealed this was a single instance of double payment. The United States
Attorney's Office for the Eastern District of Virginia declined to take this case.

Accordingly this case is closed.
                             NATIONAL SCIENCE F o U N D A ~ O ~
                                   4201 WILSON BOULEVARD
                                  ARLINGTON, vlRG1NiA -30                         I   \




     OFFICEOF
INSPECTOR GENERAL




MEMORANDUM

Date:                March 20, 1997

To:                  File 196050028
                                        , Special Agent ' ---                -    -
From:                                                     C
                                                                - ---
                                                                .C           .-
                                                                                      4      4



Via:                                     Special Agent-in-Ch-.,          - ..                    .-

Re:
                      Expenses to NSF Grants by D -
                                                                        ..
                      Results of Investigation Involving ~ o u b--l e - M i n gof Travel



This report concerns Dr.                a Professor of Chemistry at                 ,, in
           South Carolina. We investigated to determine whethet         aived duplicative
payments for travel expenditures reimbursed b y his National Science Foundation (NSF)
grants. We have determined that, in one instance, he received reimbursement from both
NSF and the American Chemical Society (ACS) for the same travel expenses ($190) incurred
during a trip to an ACS function. In another instance, we determined that he received
reimbursement from both his ACS grant and the ACS meeting for travel expenses ($200)
incurred during a trip to an ACS function.


The Double Reimbursements

A.      Trip to ACS National Meeting, Anaheim, CAYApril 1-6, 1 995

From April 1-6, 1995          attended the ACS National Meeting in Anaheim, C A , During
rhiq meeting, hc gave                    ~ dscr ~ I t i i i n gthe rl~rt?ri!?g,received a $!?9 c~P-:~.-!%Q~G..
                           l z c ~ u r 5an,!.,
ACS to waive the cost of the meeting's $190 registration fee. O n June 12, 1995,                        ,ned
and submitted a                                1: Voucher requesting a reimbursement of $738 for
expenses incurred during this trip, including $248 for lodging, $176 for meals, and $190 for
the registration fee. Of these funds, $538 was charged to NSF grant -                               , ___-..
--                                                     lcluding the $190 registration fee. However,
       id not claim any reimbursement for any means of travel to and from this meeting. .
During an interview with an NSF 01G special agent,                 led that he did not realize
that the $190 he received from the ACS organizers constituted a payment for the meeting's
registration fee. Rather, he claimed, he thought the funds were to be used to defray any of
his expenses and so he reimbursed himself for travel expenses he had paid for using his
personal funds.                                      --
                         also stated to the NSF OIG special agent that there were many
                                                                     _ _vel Vouchers so he did
expenses he did not claim on this and other                      ,

not feel that he did anything wrong by keeping these funds. However, upon being told by
his supervisors that the $190 was to be applied towards his registration fee,       :imbursed
the NSF grant $190 in April, 1996.

Documentary evidence obtained from Dr.                       treasurer of ACS' .Inorganic
Chemistry Division, shows that the $190           to      was  to be used to defray the
registration fee. In an electronic mail message dated March 23, 1995 to another meeting
organizer,              :es:

       Here is a partial list of the checks I would need. I still don't know exactly what we are giving
                                                                 .. . . .
       our foreign travelers, but we are paying registration fees--for    speakers. So, we need checks
       in the amount of $190.00 for the following: .. .            +....
However,                 statements to an NSF OIG agent contradict his own electronic mail
message.               - x e d that the $190 was to be used to defray the registration fee but
could- also
       -    be used to defray any of the other travel expenses as the individual traveler saw fit.
             cated that he recalled it was up to the traveler's discretion to apply these funds.


B.                                                                     -
     Trip to ACS R e g i o d Meeting, Ann Arbor, MI, May 3 1 lune 2, 1994
From May 31 through June 2, 1994,
                                        - - ..
                                                 tended an ACS Regional Meeting in Ann
Arbor, MI. During this meeting, he gave a lecture and, on approximately September 12,
1994, received a check for $200 from ACS for this lecture. On June 9, 1994,        jned and
submitted a             - --.      - .avel Voucher requesting a reimbursement of $519 for
travel expenses incurred during this trip. These expenses included $159 for lodging, $295 for
air travel, and $65 for the meeting's registration fee. However, Kolis did not claim any
expenses for meals or any other category. Approximately $219 of this reimbursement was
charged to               u
                                                                           - .---      .
During an interview with an NSF OIG special agent             :ed that he believed that the
$200 he received from the ACS was to be used to defray his travel expenses but that he was
not required to use rhae funds for any one specific expense. Thus, he stated, he kept the
hrlds for hims:lt b&'lise [here were many expenses he paid with-hi;-person4 kiids ihac ire
did not claim on this and other      -.
                                                             -   .vel Vouchers.

Statements by an ACS regional meeting treasurer and documentary evidence support
claim that these funds were not designated for any one specific expense. The treasurer,
     .. --,.-i, told an NSF OIG special agent that these funds were to be used to defray
general travel expenses but not any one in particular. In addition, a cover letter authored by
          2t accompanied        check simply states:

       Enclosed please find a check in the amount of $200 towards your expenses for participating in
       the Symposium o n Recent Advances in Metal Chalcogenide Chemistry in the recent Joint
       Central-Great Lakes Regional ACS Meeting in Ann Arbor.



Conclusion and Recommendations

NSF OIG reviewed account summaries for           grants, verified purchases and deliveries
made under the grants, and salary payments. This review did not identify other misuse of
grant funds. The double payments appear to have been isolated incidents, and do not appear
to be part of a pattern of fraudulent acts.

Under 18 U.S.C. ยง 1001, the use of "any false writing or document knowing the same to
                       .
contain any false . . statement or entryn is punishable by incarceration for up to five years.
In addition, the False Claims Act, 31 U.S.C. $3 3729-3733, provides for civil liability to the
federal government by anyone who "knowingly presents, or causes to be presented, to an
                                                                  . .
officer or employee of the United States Government . a false or fraudulent claim for
payment or approval[, or who] knowingly makes, uses, or causes to be made or used, a false
record or statement to get a false or fraudulent claim paid or approved by the Government."

         )ears to have violated 18 U.S.C.Q 1001 by submitting the            University
Travel -vouchers certifying that his claims were appropriate under all state rules and
regulations:

       I certify the expenses listed herein were incurred and paid in the performance of my official
       duties, and that this claim is true and correct in every material matter and conforms with the
       requirements of the State laws, rules, and regulations.

This submission does not violate the False Claims Act, however, since he did not intend to
get a false or fraudulent claim paid or allowed by the government. In both instances,
claimed that he did not know what the funds from ACS were to be used for and that, in any
case, he used these funds to pay for other travel expenses he did not claim on these or other
travel vouchers. In addition, the absence of repeated similar activity suggests that this claim
may be credible. Finally, there is no evidence of intent in his statements, and without
additional evidence it does not appear that intent to defraud the government can. be
established.

Rased 9 ~ this
           -   analysis, lare b ~ l i e v c+hat may ha:re .I;.olated.the False Claims Act or 18
U.S.C. 5 1001 as to the double reimbursements arising out of his attending the ACS
meetings in Anaheim, CA or Ann Arbor, MI. However, since ACS was going to reimburse
him but         "1 not know specifically for which expenses, he accordingly did not place all
of his expenses on his travel vouchers and then kept the funds given to him by ACS. Thus,
the evidence that he intended to receive duplicative payments is weak.
e   Because the events described in this report involve potential violations of federal criminal and
    civil law, we have referred this matter to the Department of Justice as required by law. The
    Department has declined to pursue the matter on a civil or criminal basis. This matter is
    closed.