oversight

Grant Fraud

Published by the National Science Foundation, Office of Inspector General on 1997-03-31.

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

                  1
                                            NATIONAL SCIENCE                 FOUNDATION
                                                             4201 WILSON BOULEVARD
                                                            ARLINGTON, VIRGINIA 22230




             OFFICE OF
         INSPECTORGENERAL




I   MEMORANDUM

                             arch
                             .......
                                     31, 1997   .........              .   .....   .A- - -    .......                  .....................        .- -
                                                                                                                                               ,-
                                                                                                                                                           ....   .-....


    To :                 Case File No. I9

    Through:          s-pe                                                                   vestigations Section

    From:                                                    w
                                                  Forensic Scientist, Investigations Sectio
                                                    ecial Agent, Investigations Sectio
                                                    Investigative Attorney, Investigatl

    Re:                  Case Resolution




                  -
                                                                           we investigated              to determine whether Dr.



    the same travel expenses he incurred in August 1

    I.        Background

          has          been employed a m a s a full-time professor since August 1992. At one
    point, e was simultaneously employed b            University. He remained on a leave of
    absence fro         during the academic              and 1993-94. Dr
    active NSF grants.                                                                has




    11.       The Double Reimbursement
         the trip to the mathematics department accountant in order for the accountant to prepare a
         -ravel       expense report for him                                  ses totaled $2,401 and
         included airfare of $459 and hotel                                  ned and submitted the
                        travel expense repor                                 el expense report listed
         many trips, including his trip                                       did not include any
         information regarding a reimbur                                    id include information
         about a reimbursement related to a trip to Santander, Spain (one of the other trips he had
         claimed on this same travel expense report).
......    .
          .                         ...   ..    ........-..-......
         Approximately nine months prior to the trip, however, Dr.
                                                                     -.                  ...
                                                                                  was informed by-.&
                                                                                                  ...  .e.-..,
                                                                                                            ...

                  at it would fund a portion of his trip to th                     ately September 13,
                                  drafted, signed and subm                           Expense Voucher
         requesting     , ,     for his airfare exDenses. B                         ive reimbursement
                                                            t h m n d l f o r the airfare expenses
                                                          on, because these expenses were grant-related,
                                                           from his NSF grant funds. The
                                                           es incurred during the       i n P a k
                                                             and deposited the chec into is personal
         bank account. At that time, he did not use t h e m f u n d s to pay back the NSF grant,
         which had already fully reimbursed him.

         Dr.             has acknowledged that he received duplicate reimbursements. He said that he
         sub              vouchers because he was unsure as to when and how much
         reimburse him for his expenses. He claimed that he intended to reimburse              -
                                                                                               grant
         with the funds fro

                            'S
         actually received th
                                     when he received them, but that he forgot to do so when he
                                     check. He said that when he realized that he had neglected to
         reimburse the NSF grant in August 1996), he went to his department chairman the very
         next day, discussed the matter with him, and wrote a personal check t o f o r $1,700. The
         $1,700 was subsequently credited to the NSF grant.


    w               s said that he paid back more than the amount of the double reimbursement for
         t ree r sons. First, he realized that t h t r a v e l expense report was filled out incorrectly,
         and charged the NSF grant $215.71 for previously paid hotel charges for the trip to Zurich.
         Second, h~ remembered that he received a larger amount in reimbursement funds from his
         visit to Sahtander, Spain than he originally reported on the travel expense report. Finally,
         Souganidis said that he thought he might be liable for financial penalties for his failure to
         reimburse the grant.

         111.   Other Payments

         In an interview with NSF OIG   '   special agents,            stated that he had received
         payments from other universities/organizations in the form of honoraria payments. He said
         that he received honoraria during some of the same.trips wherein he claimed reimbursement
                     for travel expenses from his NSF grants, but that he used these honoraria during his travel to
                     defray expenses such as lodging and meals. Despite receiving over twenty honoraria
                     payments since 1993,-aimed                to be unfamiliar with any o      f    r NSF's policies
                     regarding crediting honoraria to the program that supported travel to and from a host
                     organization. After the i n t e r ~ i e w --
                                                                , ~ r o v i d ae list
                                                                                  d of all the honoraria that he has
                     received over the past four years.

                      In analyzing the list, we found six instances geh  cw
                                                                          ra'ehre                     to his NSF grants for
I                     travel expenses plus the honoraria he received while on that travel exceeded the actual travel
                      expenses by $200 or more. This analysis, however, actually supports -ontention
                      that he used his honoraria to defray part of his travel expenses because, for the six trips,
,
I
l
    -   --   ---
                    w
                   - --
                             i     d not charge his
                                                  __ NSF grants for expenses such as lodging and/or meals. In fact,
                      on one of these trips, he used ~ e r s o n a funds
                                                                   l         to make up-the differenceb-etWeEnnliiG5%pEiKes
                                                                                                                              --


                      and what he claimed.

                     IV.     Conclusions

                     NSFOIG reviewed account summaries, consultant and participant support payments, salaries,
                     and all travel expenditures for -_rants.         This review did not detect additional
                     misuse of grant funds. The doublep$ment appears to have been an isolated incident.

                               appears to have violated 18 U.S.C. $ 1001, False Statements, by submitting the
                                expense report certifying that he did not and would not receive any other
                     reimbursement for the expenses,listed. This certification stated:




                                  stated in his affidavit that:




                     Intent is not required, however, to violate 18 U.S.C. $ 1001. His intentional submission of a
                     false statement, i.e. the certification, is sufficient to violate the statute. However, the fact
                     that this was an isolated incident, as opposed to part of a pattern of abuse, suggests that it is
                     unsuitable for prosecution.

                                  submission of duplicative documents may have violated 3 1 U.S.C. $3 3729-3733,
                                 aims Act. He claimed that he intended to reimburse his NSF grant. We have
                     found no evidence which illustrates a pattern of submitting duplicate travel vouchers, and
                     therefore the intent to defraud the government cannot be established.
                               In addition, we believe that            can claim that the six trips described above were
                               related to his NSF research,           these trips were for collaborations not mentioned in
                                                    proposals. The NSF Grant Policy Manual's regulation on travel costs is




                               We have concluded that ay-               be able to legitimately claim that these expenses
                               were "relatedn to his NSF grants and therefore are allowable costs against his NSF grants.
                               These facts appear to support           assertion that he was using the honoraria to offset
--   - - .- .. . . . .. .. -
                     ~                             anddid
                               his.tr.a~l.-ex.~e-~se_s_.,-            profit from his travel charged to his NSF
                                                                                                            _-  grants.
                                                                                                                 ---_- .-    -.    -
                                                                                                                                  _.




                               The U.S. Attornev's Office for the Eastern District of Virginia has declined this case for
                               prosecution. Due ro the lack of evidence to support tha-has           formed a pattern of
                               fraudulent behavior and activity, this case is closed.