Federal grant money can be used in a variety of ways, including research, product development, enhancement of programs, and to fund projects calculated to benefit the public interest. However, grant funds are a limited source funded by taxpayers and are subject to strict eligibility and award criteria. Not only that, a grant recipient can face liability for misusing grant money or improperly documenting how federal grant funds are spent.
In today’s case, we look at a grant fraud issue involving Vancouver-based nLight Photonics, Inc. – a company dedicated to the advancement of laser technology across a number of industries. According to the Department of Justice, the company is alleged to have wrongfully received grant funds for which it was ineligible, and has agreed to settle the matter for $420,000.
nLight Photonics was originally founded in Seattle, Washington, and recently relocated its headquarters to Vancouver, British Columbia. It also maintains laboratories and facilities in Finland and China.
Details of the allegations against nLight Photonics
According to the details released by the Department of Justice, nLight Photonics is alleged to have wrongfully certified itself as eligible for grants from the U.S. Army, U.S. Navy, U.S. Air Force, NASA, and the Department of Energy. Specifically, the grant money involved derived from the Small Business Innovation Research program, which is designed to promote and encourage advances in the science and technology industries.
In order to qualify for grant money under this program, an applicant business must either be majority-owned by an individual or majority-owned by other companies that are themselves majority-owned by individuals. In essence, the recipient must be a small business.
Allegedly, nLight Photonics falsely certified to federal agencies that it was majority-owned by an individual or individually-owned companies when in fact it was more than 51 percent owned by a variety of companies, including several venture capital firms. In other words, the ownership structure of the company did not meet with the regulations set forth by the Small Business Innovation Research grant and the company’s receipt and use of the money triggered possible liability under the False Claims Act.
Unlike many other False Claims Act cases, this proceeding did not involve a whistleblower. Instead, nLight came under scrutiny after it self-reported possible eligibility issues pursuant to a routine request for information by a government contracting officer.
The Department of Justice has maintained that liability on the part of nLight has not been established. Likewise, the government has not called into question the quality of work performed by nLight.
Contact Berger Montague today
If you are aware of misuse of federal grant funds and would like to speak to a reputable whistleblower attorney, please contact Berger Montague right away. Lawsuits initiated by whistleblowers under the False Claims Act can potentially result in a reward of up to 30 percent of the ultimate verdict or settlement.