Twenty-six federal agencies, including the Department of Energy, the Department of Agriculture, the Department of Health and Human Services, and the Department of Defense, give out billions of dollars in federal grants every year “to carry out a public purpose.” For some of those agencies, a significant portion of the federal money that they receive every year is earmarked for research and development funding. In 2012, the federal government gave agencies close to $139 billion specifically for research and development. The agency research and development projects are often granted to and carried out by private companies, universities, and hospitals.
Occasionally, research funding and other grant recipients engage in fraudulent activities at the expense of taxpayers and take advantage of the agencies that have entrusted them with, sometimes substantial, sums of money for a specific use. Some of the fraudulent practices that grant recipients can engage in include:
- Making false statements on applications for grants
- Knowingly failing to comply with the conditions of the grant
- Fabricating data
- Falsifying reports
- Using grant funds for personal, or other improper, purposes
- Knowingly failing to comply with federal regulations
These wrongful actions, as well as others, can form the basis for a whistleblower lawsuit under the False Claims act.
Real World Examples of Recent Research and Grant Fraud False Claims Act Cases:
- 2011: The Institute of International Education paid $1 million to settle a whistleblower lawsuit alleging that the organization violated the False Claims Act. The whistleblower, a former employee, claimed that the organization falsely reported how it spent government funds, misused those funds, and shifted funds between different grant programs. As a result of the settlement, the whistleblower received an award of $170,000.
- 2003: Northwestern University paid $5.5 million to resolve whistleblower allegations that the university made false statements on applications for medical research grants by overstating the amount of work that the university’s researchers would be able to dedicate to the grant project. The whistleblower, a former employee of the university, received $907,500 from the settlement.