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fraud case studies

university agrees to pay $2.5 million to settle false claims allegations

A university in New England agreed to pay $2.5 million in damages and penalties to settle civil allegations that the university submitted false claims on approximately 500 federal grants awarded to them.

The federal government awarded the grants for work to be performed by two of the university’s specialized service facilities. The grant awards were made by numerous federal agencies including the Department of Defense, the Environmental Protection Agency, the National Science Foundation, and the National Aeronautics and Space Administration.

The government specifically alleged that the university submitted grant applications containing incorrect or overstated information about anticipated expenses. The university charged certain expenses that were not properly chargeable and submitted invoices to the government for three types of grant expenses. First, the government alleged that the university did not utilize a proper basis for setting and regularly updating its billing rate structure, as required by federal law. The university’s failure to revise and appropriately set its billing rate structure resulted in numerous false claims being submitted for payment to the United States. Second, the government alleged that the

university failed to follow federal law for calculating how extra compensation should be paid to university faculty members for additional work on grant supported research activity and that improper excess charges were therefore charged to the grants. Finally, the government alleged that certain of the grants required cost sharing or matching by the university and that the university failed to provide the requisite cost sharing or matching.

The university has also entered into a compliance agreement with the federal government that requires the university to make significant changes in its grant administration program. In addition, the university must certify that it has in place an adequate compliance program for preventing fraud and false billings to federal grants.

This investigation was conducted jointly with the Defense Criminal Investigative Service, the Defense Contract Audit Agenc , and the U. S. Army Criminal Investigation Command.

when good money goes bad • true stories of grant fraud at epa

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