Published by the National Science Foundation, Office of Inspector General on 1998-08-24.

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

    -   -                            --       -   ..-     -                         -   -T--   -

                                                    NATIONAL SCIENCE FOUNDATION
I                                                    OFFICE OF INSPECTOR GENERAL
                                                       OFFICE OF INVESTIGATIONS

                                          CLOSEOUT MEMORANDUM

        TO: AIGI        File Number: I96060038                                          Date: 26 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 fiom the file in conformance with standard closeout documents.

             Our office was informed that the subject' was alleged to have made false statementsor claims. The
             subject applied for and received M n g fiom both NSF and another federal agenc)r' for essentially
             duplicate projects, without making the required disclosures about current and pending support.
             Further investigation found three groups of duplicate funding involving NSF and two other
             government agencies." The subject left his corporation4and the corporation agreed to pay $547,000
             and to monitor its SBIR program to ensure this does not happen again.

             Accordingly this case is closed.


                                                                                                                    U.S. Department of Justice                                              I

                                                                                                                    Emern District of Vir@                                                  I

                                                                                                                      ]96060030                  ,

                                                                                                                    Janet Rclvrprdft                               (703) 299-3774
                                                                                                    .           -   AS&&     United &tuAdlonry   '   .   "   F   ' p03) 299-3983        .
                                                                                                                    2 l m lm'uonAvenue
                                                                                                                    dewdia. Vughia 22314
                                                                    .   .                                              ..

                                 .       August 24, 1998    .               .   -

             .           .
             .           .             special Agent
!                .           !         Office of Inspector General
                                     - National science Foundation                    .
                                       4201 Wilson Blvd.                                  . .
                     .       .        .Arlington, VA 22230                                      .       .
                                                                                                                                 .   .
                                                                                                                                                                                    .   .

                                                I have enclosed for your recdrds a fully executed copy df the-Releaseand

    5                                    Settlement Agreement in connection with the abovecdptioned matter.

        .,                                      Once again, Iappreciate all of R e assistance from NSF. As you know,
                                         ,      your former prot6g6, and              of DClS worked very hard to achieve the
                                          good result we got in this investigation.

                                                                                    Sincerely,              '                            .   .
                                     ,   .
                                                                                    HELEN F. FAHEY."
                                                                                    UNITED STATES
                                                                                            ..    ATTORNEY

                                         Enclosure      .       '

                                    This Release and Settlement Agreement ("Agreementn) is entered into by and between the
                            UNITED STATES OF AMERICA ("United States"), by and through the undersigned, and-

                  .        (                                        ) by and through the undersigned.                                           I

                                    WHEREM, the National Science Foundation and Defense Criminal Investigative Service

                            initiated an investigation into alleged false claims'presented under the Small Business innovation

                            Research Program and other federal grants and contracts h m the time period 1991through the date

                            of this Agrament and that investigation was refericd to the United States ~ttorneyfor the Eastern
                                                    .   .
.   .
                            District of Virginia;
    ;: .)
                      .      .      WHEREAS,                        has incurred, and is cdntin&    to incur, substantial dt(orneys'-fcs and
                                                            '   ,     >,

                            aaociatedmstsandwishesto settle~is~who+c~avoidincunid~~erfcesandmsts;&d

                                    WHEREAS. a                  n      d the United States wish to settle their disputes arising out of those
                            allegatiops without resort to Litigation,.

                                   NOW, THEREFORE, in consideration of the matters set forth above and the following

                            mutual covenants. a         n           d the United States hereby agree as follows;

                                                                           1. . OBLIGATIONS OF               .     .

                          . . .             1.1Payment to the United States. a g x e e s to pay to ,the.UnitedStates the sum

                            of Five Hundred Forty Seven Thousand Dollars ($547,000.00)                  ;

            .   .            1.2 Manner and Method of P a pent.. The payment provided for,in subparagraph
                                                                                              . .
                                                                                                          1.1      .-   .    . ..

            shall be by means of electronic funds transfer according to written instructions h m the Financial

            Litigation Unit, United States Attorney's Office for the Ebtem D M c t of Virginia, 101 West Main

            Street, Norfok Virginia 23510, within 30 days of the receipt of payment instructio,m.

            Notwithstanding any other provision of this Agreement, if the electronic h d s transfer is not

            successfully completed within the 30 day period described herein, this Agreement shall be null and


    .                .   .                                                                                              ..
                             2.1 In consideration of the agreements and payments set forth herein, and, except

            for such obligations as are created by this Agreement, the Uriited States hereby waives, relemes and

            promises to re^ h m instituting,prosecuting or maintaining any civil or monetary claim, action,
                                                   .   .
            .suit. or procee!diigunderthe False Claims Act, 18 U.S.C. $ 287 and 3 1 U.S.C.
                .                                                                            $8 3729-3733, the
            False Statemefits Act, 18 U.S.C. Q 1001; the Truth in Negotiations Act, 41 U.S.C. Q 2546 and 10

            U.S.C. $5 2306,2306a; and the Prpgram Fraud Civil Remedies Act, 3 1 U.S,C. Q 3801,et seq., or

            the canmon law a g a i n s t arising h m its submission of proposals, researchresults and claims

            for paymefit to the National Science Foundation, the National Aeronautics. and Space

            Administration and the Department of Defense under the Small Business Innovation Research

            Program and other federal contracting programs fiom January 1991 through the date of this

                                                                                        ~ ~ fitrtber agree to re6rain fiom
                                          2.2 The Department of Justice, NSF, N A S A ' DOD                                             ..

                          instituting any administrativeproceeding, including but not limited to suspension and/or debarment,

                          arising h m the above-referenced submissions.

                                          2.3 The United States Attorney's Office for the Eastern District of Virginia has

                          agreed not to niminally                    and/or its officers aud directors for conduct described in

,                         connection with the submission of proposals9research results or claims for payment to the United

                          states:fiorn   an- 1991 to the.date of this Agrament.
               . ..   .                   2.4 After completing its investigation, the united stateshas concluded that there was     ,   .
                           .    .

                          n o fiaud or other violation of ' f a lstatute or common law.based on                 submission of                '     .       .

                      propos&9r&saroh results and claims for                                                 . in.connection
                                                                               as of the date of this agreement                                            .
        .- .                                                                                                        .
                                                                                                                                             ' ,       ,

    ,                 -     .
                                                                                                                            .   :

                                                                                                 .   .
                                                          3. rnCELLANE0US PROVISIONS
                                                                                                                        .   ,

                               . .
                                          3.1 ,   &   &    t   i   It is u n d e k d ,andagreed that, wtqt.as expressly stated

                      hmin, this Agrsement expresses full and complete settlement of liabilities claimed and denied, the

                      there is no agreement or reservation not clearly expressed h&i'md, regardless of the adequacy

                      or inadequacy of the amount paid that this Agreement is intended to avoid litigation and be final and

                                                                                                                                                               .       .
                                                 3.2 Q
                                                     -.                  This Agreement does not constitute an a&sion                       of liability
                                                                                                                                                  .   .

                   , ,         b         y and shall not be used as evidence of liability
                                                                                   .      or as an admission of liability, or otherwisee

                               in any other action.       -

                                                 3.3 Tax Liability. Nothing in this Agreement is intended to affed, nor shall the

                               Agreement be construed to affect, any
                                                                                                has or may have under the Internal Revenue

                               LAWS, Title 26 of the United States Code.      .   '     .

                                                 3.4 Costs under the Federal Aixuisition Redation and Affected Contracts. It is

                  ..   .       &that         a l l &sts otherwise available under'any
                                                                                                        of thi ~ed&alAcquisitidn ReguIation                '       '       '

                                                                                                                                                                               . .

                           . '.incurred for or on behalfo f l      and its offica, directorsi agents andemployeesin conaection with

                                  (1) the amounts 'covered by this Settlement Agreement, (2)                 investigation and defeosc of the

,.   '.                        mattes coveredby this Settlement Agreement, (3) the negotiation of the Settlement Agreement, (4)

                           ,   the government's audit and investigiti~nofthe matters covered by this Agreement, and (5) the
          :                                 made'
                                            .                      pursuant to thii Settlement ~g&?mentshall be unallowab1'e
                                              . t i the ~nitedl~tates                                                                                      .
                                                                                                                                    .         .

                       .       costs for government contract accounting purposes. All such costs deemed unallowble shall be

                       :       separately acco&tkd for by            by identification of costs i n d i
                                                                                                                                .       .     .

                                           . .   3.5 Y         l        m              u            t        e .Resolution. Should any.action

              -                to d o r c e or iaterpret this Agreement, or to resolve any dispute hereunder be required, the parties

                               achowledge the jurisdiction of the fedM courts.and agree that venue for any such action shall be

                               in the United States District Court for the Eastern District of Virginia.

                                                 3.6 -ComplianOe. Under the A g r e e m e n t , assuns the United States that it has

                               taken steps to assure fidl and accurate compliance with applicable statutes, regulations and program
        requirements for federal grants and contracts.                               ,

                                                                                                                                 j       I


                         3.7 Bindine Agreement This 'Agreement'shall be binding upon and inure to the                        . . I       i
    benefit of the successors,, assigns,.trustees and employees of the parties hereto.
                                                                                                                 .       .       i
                                                                                                                                 .       I

                         3.8 CapaciQ. Each

                                                         who signs this Agreement in a representative capacity

                   .                                                                                                 .                   I
                                                                                                                 ,               i


                                                                                         '                                       I       I

                                                                                                                                 iI      1

    warrants that he or she is duly authorized to do so.

                         3.9 Gosh. Each party shall bear its own costs!

                                           '.                                                            .   .
                                           The effective date of this Agreement shall be the date it is signed       ;

,   by all parties.


                  2Y00 Jarnibson Avenue'
                  Alexandria, Virginia ,22314
                  ~ounsel'forUnited States of America

                  2 100 Jamieson Avenue
                  Alexandria, Vuginia 22314
                                                 '   '


                  Counsel for United States of America
                Richard 'Dunn                                 Date           /
                General counsel    '

                Defense Advance Research Projects Agency
                370 1 .NorthFairfax Drive
                Arlington, Virginia 22203

                Anita Eisenstadt
                                                                             12- 1 5 9 8

                Assistant General Counsel
                National Science Foundation
                4201 Wilson Boulevard                   .
                Arlington, Virginia 22230

:   I           Authorized Representative                     Date
                National ~erokuticsand
                Space Admhbtration
        -   1



                   e tuld Don, LLP
                1455 Pennsylvania Avenue, N.W.
                washingtoh, D.C. 20004
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