oversight

Grant Fraud

Published by the National Science Foundation, Office of Inspector General on 1999-06-15.

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

      $
          i             i   :*
'b
 'a
          11
          L
                                i



          I                                                  NATIONAL SCIENCE FOUNDATION
          I                                                   OFFICE OF INSPECTOR GENERAL
                                ,                               OFFICE OF INVESTIGATIONS

                                                     CLOSEOUT MEMORANDUM
          I
          I


          TO: AIGI                  File Number: I97070031                                         Date: 02 March 2002

          Subject: Closeout Memo                                                                             Page 1 of 1

          I

          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 committed embezzlement, theft, or
                       diversion of grant funds. The university's2internal audit reported that the subject had been using his
          '            university telephone card (which was charged directly to his NSF grants) to make personal telephone
                       calls. Total charges over a ten-year period (1987-1997) exceed $48,000. In addition, the university
          1            questioned purchases made by the subject and charged against his NSF grants. The case was
          :            resolved with a civil settlement with DOJ. The subject paid $65,000 to the US Government and
          j            $3,504 to the University. The University and the subject agreed that University officials would
                       review all charges on the subject's Federal grants over the next three years.
          \


              I
                       Accordingly this case is closed.




                        Charles B. Harris, UC, Berkeley
                        University of California, Berkeley

              t

                                     Prepared by:                     Cleared by:

              I                     Agent:          Attorney:       Supervisor:     AIGI
                    Name:


              I
              a   Signature &
                     date:
              I
                       OIG-02-2
JUN-10-99   l2:59   Frorn:U S ATORNEYS OFFICE




                                            SETTLEMENT AGlW5MENT




               This Agreement is entered into this
                                                      Parties

                                                      ,/*
                                                        day of         w.                1999 (the
      efFcctivc date of the Agreement), by and between the United States of Amerioa, acting through

     the United St,atesDepartment of Justice, a d Dr. Charles B.Harris (Charles Hartis), and Mrs.

     Ingrid E. Hmis (zngrid Harris). As a preamble to this Agreement, the parties state:
                                                     Preamble
               WHEREAS, at all times relevant, Charles Hams was a professor in the Department of

     Chemistry,at UCB,and the Principal Investigator for five National Science Foundation Grants

     awarded to UCB: CHE-8614442; CHE-9203970; TNT-92 15135; CHE-922 1392; and CHE-

     9529105 ("the Grants");

               WHEREAS, Charles Hams was assigned a California State government telephone calling

     card by UCB for his use in the operation of the Grants; the costs incurred throu~hthe making of

     telephone calls with the calling card, and the associated indirect costs, were directly charged to

     the &ants;

               WHEREAS, Charles Harris was provided an office telephone by UCB to make telephone

     calls for his work in the operation of the Grants; the costs incurred through the making of

     tclcphonc calls with the office telephone, and the associated~indirectcosts, were charged to the

     Grants;

               WHEREAS, Charles Harris was permitted to make purchases of equipment for use in his

     operation of the Grants; the costs incurred through the purchases of equipment, and the
a
    i
        JUN-18-99   12:59   Fr0m:U.S A'TORNEYS OFFICE




              associated indirect costs, were directly charged to the Grants;

                      WHEREAS, Charles Harris was permitted to travel related to his work in the operation of

              the Grants; the costs incurred for such travel, and the associated indirect costs, were directly

              charged to thc Orants;

                      WHEKEAS, as a result of alleged improprieties relating to charges made on the Grants by

              Charles Harris and/or his wife, Ingrid Harris, and as a result of allegations that those improper

              charges related to the charging of telephone calls, the improper reimbursement for travel

             expenses, and the improper purchase and/or use o f property,    an investigation and audit of the
             Grants was conducted both by the University of California and by thc National Scicncc

             Foundation.

                      WHEREAS, the United States alleges that, during the operation of the Grants, Charles

             Harris andlor his wife, Ingrid Harris, improperly made personal telephone calls not associated

             with the Grants using the telephone calling card and the office telephone and improperly charging

             such calls to the Grants;

                     WHEREAS, the United States also alleges that indirect cost charges associated with the

             personal telephone calls were also improperly charged to the Grants;

                     WHEREAS, the United States also alleges that the charges for such,personal telephone
             calls wcrc charged to the Grants through the use of an authorization fonn eubmitted by a UCB

             administrator, based upon information provided by Charles Hams;

                     WHEREAS, the United States fbrther alleges that during the operation of the Grants,

             Charles Hams purchased personal equipment that was not to be used in the operation of the
             Grants and improperly charged the costs of such equipment to the Grants;
.-
     %   8
             JUN-10-99   12:59   Fr0m:U.S ATORNEYS OFFICE                      41 54366740




                          WHEREAS, the United States also alleges that the indirect cost charges associated with

                 the purchases of the personal equipment made by Charles Harris were also improperly charged to

                 the Grants;

                          WHEREAS, the United States fbrcher alleges that during the operation ofthc Grants,

                 Charles Harris caused to be submitted requests for duplicate reimbursement on five UCB travel

                 vouchers for travel by Charles Harris associated with the operation of the Grants and received

                 such duplicate reimbursements;

                          WHEREAS, the United States alleges that by improperly charging the costs of the

                 personal telephone calls and indirect cost charges associated therewith to the Grants rhrough use

                 of the telephone calling card and the office telephone, Charles Hanis and/or Ingrid Hanis violated

                 the False Claims Act, 3 1 U. S.C. $5 3 729,    sea., by submitting numerous false claims for
                 payment of the charges, and that the United States is entitled to relief therefor;

                         WHEREAS, the United States fbrther alleges that by improperly charging the costs of the

                 personal equipment and indirect cost charges associated therewith to the Grants, Charles Hanis

                violated the False Claims Act, 3 1 U.S.C. 95 3729,      seq.,and that the United States is entitled to

                relief therefor;

                         WI-ERIEAS, the United States firther alleges that by submitting requests for duplicate

                 reimbursement for travel vouchers and receiving such duplicate reimbursements and the indirect

                                                                                                          $5
                cost charges associated therewith, Charles Harris violated the False Claims Act, 3 1 U.S.C.

                3729,      m.,and that the United States is entitled to relief therefor;
                         WHEREAS, Charles Harris and Ingrid Harris deny the allegations set out above, and deny
                that the United States is entitled to relief; and
JUN-18-99   12:59   Fr0rn:U.S   ATORNEYS OFFICE                  41 54366748            T-334   P.07/12   Job-957




             WHEREAS, the United States and Charles Hanis and Ingrid Harris mutually desire to

    settle these disputes between them;

             WHEREAS, the United States and Charles Harris and Ingrid H ' s agree that this

    Agreement is entered into for purposcs of compromise of claims arieing out o f the Grants, and

    neither the fact of this Agreement nor any of its provisions shall constitute an admission or be

    utilized as such by any party, except to prove and enforce the terms of this Agreement;

             WHEREAS, the United States and Charles Ham'sand Ingrid Harris agree that the intent

    of this Agreement is to settle all outstanding claims relating to the improper charging of telephone

    calls to the United States, the improper charging to the United States of indirect cxpcnscs relating

    to telephone calls, the improper charging to the United States of purchases of personal equipment,

    and the improper charges to the United States relating to travel expenses; and

            WHEREAS, the United States and Charles H a m s and Ingrid Harris agree that it is also

    the intent of the United States through this Agreement to settle any and all claims that the United

    States may have against the University of California andfor the Regents of the University of

    California for the travel expenses of Charles Hams, the indirect costs relating to those travel

    expenses, the purchases made by Charles Harris, the indirect costs attributed to those purchases,

    and the telephone calls made by Charles Harris or Ingrid Harris and the indirect costs related to

   those charges, charged to thc Grants;

            ACCORDINGLY, in reliance upon the representations contained herein and in

    consideration of the mutual promises, covenants and obligations in this Agreement and the

    resolution of the claims set forth below, and for good and valuable consideration, receipt of which

    is by each acknowledged, the parties agree as follows:
      13:OO   Fr0m:U.S   ATORNEYS OFFICE
                               i




                                           Terms and Conditions

        1. Within ten (10) days of the date of this Agreement, Charles Harris will pay to the

United States of America through the United States Attorney's Office for the Northern District of

California, the sum of Sixty-Five Thousand Dollars and No Cents ($65,000.00). Said payment

shall be made by Fedwire electronic hnds transfer made payable to the "Department of Jus~ice."

Arrangements will be made through the Financial Litigation Unit, U.S. Attorney's Office,

Northern District of California.

        2. Within ten (10) days of the date of this Agreement, Charles Hmis will pay to the

University of California, Bakeley, the sum of Three-Thousand, Five-Hundred and Pour Dollars

and No Cents ($3,504.00). Charles Hams shall provide a copy of this agreement along with a

Cashier's check made payable to the University of California Regents, Academic Compliance

Office,200 California Hall-1500, UCB, Berkley, CA 94720.
       3. In addition to the payments provided in paragraphs Nos. 1 and 2, above, for a period af

three years beginning on rhe date of his agreement, Charles Hams shall be personally rcsponsiblc

for individually reviewing any and all telephone calls, purchases, and reimbursements for travel

expenses [related to grants for which he is the principal investigator or w-principal investigator] .

to assure that there are not any improper charges made to the National Science Foundation. He

will kccp a personal ledger documenting his review and approval of dl telephone calls, purchases,

and travel reimbursements, as they relate to   any National Science Foundation grant. Addidonally,
for a period of three years beginning on the date of this Agreement, Charles Hams will have any

expenditures relating to any National Science Foundation grant or contract administered by the

University of California reviewed and approved, if appropriate, on a monthly basis by the
    JUN-18-99   13:00   Fr0rn:U.S ATORNEYS OFFICE                    41 54366748




         Chairman of the Chemistry Department or his designee. For a period of three yews beginning on

         the date of this Agreement any National Science Foundation grant or contract not administered by

         the University of California, on which Charles Harris is listed as the principal investigator or co-
i
         principal investigator on the grant or on the contract, thc administering agency for thc grant or

         contract shall designate a specific representative to review and approve if appropriate, the

         expenditures of Charles Harris on a monthly basis as they relate to any National Science

         Foundation grant or contract. The administering agency should issue a written representation by

         the authorized organizational representative or chief financial &cer      specifjing that during this

         same period the authorized organizational representative or chief financial officer will review and

         approve if appropriate the expenditures of Charles Harris on a monthly basis. Charles Harris will

         cause a copy of this written representation by the administering agency to be forwarded to the

         OEce of the Inspector General of the National Science Foundation, and to the appropriate grant

         official or contracting officer of the agency of the federal government which is making the grant

         or contract within twenty (20) days after the representation is signed.

                 4. Within one hundred and ten (1 10) days after Charles Harris has made fill payment of

         the amounts set forth in paragraphs Nos. 1 and 2, above, the United States will waive, release,

         discharge and promise to refi-ain from instituting, prosecuting or maintaining any civil claim,

         action or lawsuit: for money damages which he United Srares has or may have under the Falsc

         Claims Act, 3 1 U.S.C.    $6 3729-33, the Program Fraud Civil Remedies Act, 3 1 U.S.C. 4 3801, or
         common law against Charles Harris and/or Ingrid E. M        s for the telephone costs and associated

         indirect costs charged to the Grants through his personal use of the telephone calling card and

        through the use of his office telephone, for the costs incurred in the purchase of personal
JUN-11-99   13:00   Ft0m:U.S   ATORNEYS OFF ICE                   41 54366748




     equipment and the associated indirect costs charged to the Grants, and for the costs incurred by

     Charles Harris'submission of duplicate travel reimbursement vouchers and the associated indirect

     costs charged to the &ants.

             5. Until and unless there is a final release as described in paragraph No. 4, Charles Harris

    agrees that, with respect to any civil monetary claims the United States hereafter files against

    Charles Harris arising out of, or relating to, the matters covered by this Agreement, Charles

    Hams will not assert or rely upon in any way in computing the running of time under any

    applicable statute oflimitations, or by way of laches or other time limitations (whether statutory,

    contracwal or otherwise), thc pcriod between Novcmbcr 4, 1997 and six months after the first

    date on which Charles Harris fails to make the payments required under this Agreement.

             6. The parties agree that specifically excluded fiom the scope and terms of this

    Agreement are:

             (a) any disputes or claims which may arise out of the research conducted under the Grants

    listed In the preamble save for those disputes or claims that are related directly or indirectly to

    phone charges, purchases and/or use of equipment b; Charles Harris or his wife, or the

    reimbursement of travel expenses of Charles Hams during the Grants;

             (b) administrative action by the National Science Foundation or any other Federal agency

    to suspend, debar or determine the responsibility of Charles Hams;

             (c) any disputes or claims arising under the Internal Revenue Code; and

            (d) any disputes or claims for the enforcement of the terms of this Agreement.

             7. In the event of default by Charles Harris under the terms of this Agreement, the United

    States may bring an action in the District Court for the Northern District of California to enfbrce


                                                       7
the terms of this Agreement or to seek relief for a breach of this Agreement. Should the United

States need to seek enforcement of this Agreement in District Court, Charles Harris agrees to pay

all reasonable attorneys' fees and costs incurred by the United States in firrtherance of that action.
                                                                                                         -
        8. This Agreement, togcthcr with all of the obligations and terms hereof, ohall inure to the

benefit of and shall b i d assigns, successors-in-interest, or transferees of the parties hereto. By

this instrument, the parties do not waive, compromise or release any claims or causes of action

against any other person or entity.
        9. Each d t h e signatories to this Agreement represents that he or she has the hll power

and authority to enter into this Agreement.

        10.   This writing constitutes the entire agreement of the United States and Charles Harris
with respect to the subject matter of this Agreement and may not be modified, amended or

teminatecl except by a written agreement signed by all parties to this Agreement specifically

referring to this Agreement.

       1I. Charles Harris and Ingrid Hams acknowledge that they have reviewed the terms of

this Agreement with their undersigned counsel and that they have been advised of, and fully

understand, the terms and conditions set forth herein and voluntarily agree to be bound by said

terms and conditions.
.          JUN-18-99    13:01        Fr0m:U.S   ATORIEYS OFFICE
    I'.
. / I ..      .



                           In Witness whereof, the parties, individually or through their duly authorized

                  representatives, hereunder set their hands.

                                                                  ON BEHALF OF THE UNITED STATES OF AMEBICA
                                                                  ROBERT S.MUELLE~m
                                                                  United States Attorney
                                                                  Northern District of California


                  Dated:        /n     /?~?7               By:                                      7
                                                                  k-CHRIST~N           MASSULLO
                                                                  Assistant U.S. Attorney

                                                                  ON BEHALF OF CHARLES B.HARRIS

               Dated:           3 - 3 - 9 9 By:                    C L - L S X . ~ ~
                                                                  Charles B.Hams
                                                                       ..   -
               Dated:           *<   -7 -       e,
                                                1    )    By:      \   &A?-&
                                                                  Richard Duane
                                                                                       a-
                                                                  Duane, Lyman,Seltzer and Gorelick
                                                                  2000 Center Street
                                                                  Suite 300
                                                                  Berkeley, California 94704

                                                                  ON BEHALF OF INGRID E.HARRIS




              Dated:                                     By: