University of California Davis Settles Grant Fraud Allegations

Federal grant money often comes with highly-specific conditions and requirements, including the promise to only spend the money on certain expenses related to a research or development project. Failure to adhere to the terms of a grant award will likely trigger possible liability under the False Claims Act, provided the misconduct is intentional and committed knowingly.

In today’s case, we explore a recent settlement between the Regents of the University of California and the Federal government involving fraud on the front end of a grant award, including misrepresentations during the application process. The University of California Davis has agreed to pay $499,700 to the United States government, and has not admitted any liability in the matter.

Details of the grant fraud allegations

Several years ago, UC Davis was awarded grant money from both the Department of Energy and the National Science Foundation. Both agencies routinely reward grants to colleges and universities for the research and development of innovative ideas within areas including the climate, sustainable energy resources, and a broad range of technologies. While the details of purpose for the UC Davis grants are not readily available, the recent press release from the Department of Justice details several fraudulent statements and omissions made during the application process, including:

• The university failed to disclose overlapping and duplicative awards of grant money, including grants awarded by the DOE, NSF, and other federal agencies;
• The university was required to disclose research performed under prior federal grants and failed to do so during the application process;
• The university failed to disclose that the money to be used by the most recent grant reward was to cover identical research covered by additional or prior grants;
• When reporting its progress under the most recent grants, it included research tasks and milestones actually achieved under the prior grants.

In addition to its settlement, UC Davis has also agreed to implement a one-hour long training module to be used by any student or faculty member working under the terms of a grant.

Government’s response to settlement

The National Science Foundation said in a statement, “When more than one federal agency funds the same research, the integrity of the grant making process is undermined and scarce research dollars are diverted from other potentially valuable innovations… This settlement agreement sends a strong signal that failure to disclose duplicative funding will not be tolerated.”

The Department of Energy similarly commented, stating “The Department of Energy aims to fund innovative and transformative scientific research, but not research simultaneously funded by other Federal agencies…. This civil settlement should help deter such misconduct. Our Special Agents will tirelessly investigate any allegations of abuse that affect the integrity of the grant underwriting process.”

The U.S. Attorney’s Office reiterated these positions, stating “This settlement sends a clear message that recipients of federally funded grants must strictly adhere to the regulations applicable to those grants and fully and fairly disclose the information called for under these grants….Recipients who fail to do so risk significant financial consequences.”

Contact Berger Montague today

If you are aware of fraud occurring under a federal or state grant, please contact Berger Montague right away for more information about the possibility of a False Claims Act lawsuit.