On Monday, March 25, 2019, the Department of Justice (DOJ) announced a $112.5 million settlement with Duke University stemming from allegations that Duke falsified research in grant applications and progress reports to the National Institutes of Health (NIH) and the Environmental Protection Agency (EPA).
The case originated from a whistleblower complaint brought by a Duke laboratory research analyst after he uncovered evidence suggesting that several colleagues had falsified or fabricated data that served as the basis for federal grant funding.
Under the qui tam provisions of the False Claims Act (FCA), private citizens may file lawsuits on behalf of the United States in order to recover damages and penalties for FCA violations. Known as “relators,” these individuals are entitled to a share of the recovery in a successful case. In the Duke case, the relator will receive approximately $33 million.
While this is the largest False Claims Act recovery connected to federal research grants, the DOJ has increasingly brought cases against other colleges and universities in recent years. Common violations include failing to properly account for rebates and credits to reduce costs allocable to federal awards, lacking sufficient or correct time and effort documentation, and misapplying indirect cost rates when seeking federal reimbursement.
What are the key take-aways for federal grantees?
- Compliance programs are critical to helping grantees detect, mitigate, and prevent fraud and false statements
- Colleges and universities face heightened false claims risk due to their large size and diverse funding streams
- Through this and other recent settlements, the DOJ continues to focus on federal grantee claims and expenditures
FTLF Partner, Derek Adams, and Associate Christopher Frisina authored a more in-depth analysis of the Duke case and expanded upon recent developments in DOJ cases against federal grantees: Read the article.
If you have any questions about this client alert or other matters related to FCA compliance, investigations, or litigation, please contact Derek Adams or Christopher Frisina or call FTLF at (202) 466-8960.
Join FTLF’s Federal Grants Practice Group in San Diego, CA at the next session of our signature training, Federal Funding Academy, on June 26 – 28, 2019. Additional information regarding registration can be found here.