The Scientist : NewsBlog Print: Cornell settles NIH fraud lawsuit
The Scientist: NewsBlog:
Cornell settles NIH fraud lawsuit
Posted by Elie Dolgin
[Entry posted at 10th March 2009 07:18 PM GMT]

Cornell University's Weill Medical College has agreed to pay the federal government $2.6 million to settle civil claims that it defrauded the National Institutes of Health and the Department of Defense in connection with research grants between 1991 to 2007.

The dispute related to allegations that an unnamed Weill researcher failed to disclose all of his or her financial support in grant applications and annual reports. Funding agencies regularly use this information to ensure that researchers have adequate time to devote to their various projects and to make adjustments, if necessary, to the total funding provided. The US Attorney's office asserted that Weill Medical College knew, or should have known, about the researcher's omissions, according to the North Country Gazette, a newspaper in Chestertown, NY.

The fraud charges first came to light after an undisclosed whistleblower filed a lawsuit on behalf of the government -- called a "qui tam" lawsuit -- alleging a misappropriation of the taxpayer-backed funds.

Weill and the fed originally reached a settlement in September 2007, but this agreement was contested by the whistleblower. Judge William H. Pauley III, a US district judge for the Southern District of New York, however, denied the challenge and approved the settlement, the North Country Gazette reported.

This isn't the first time that Weill has been in hot water for fraudulent use of public funds. In 2005, the New York City-based medical school paid a $4.4 million settlement to resolve charges raised by Kyriakie Sarafoglou, a pediatric endocrinologist, that it was using part of a $23 million NIH research grant for private patient care. Sarafoglou also accused the school of enrolling inappropriate study subjects and filing false reports, according to the Wall Street Journal.

"My heart goes out to the researcher at Cornell who brought forth the claims of the recent case," Sarafoglou, now at the University of Minnesota Medical School, told The Scientist in an email. "For many who come forward to expose alleged misuse of federal funds earmarked for medical research, the professional fallout, irrespective of the court ruling... is often devastating to the person's career in medicine."

Weill spokesperson John Rodgers said that the most recent dispute only related to the allocation of grant funds, and that no Weill researchers were accused of engaging in academic misconduct. "The government's claims did not relate to the quality or scientific integrity of the research," Rodgers said in a statement.

Cornell did not admit any liability or wrongdoing, but agreed to pay $2,606,751 to avoid a further legal battle.


Related stories:
  • Flagging fraud
    [17th December 2008]
  • Anti-fraud physician cleared
    [10th May 2006]
  • University science squads ferret out fraud
    [11th November 2002]

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    Whistleblowers as Bounty Hunters
    by anonymous poster

    [Comment posted 2009-03-12 14:43:22]
    Many details of this case are not reported or public, but it is worth pointing out that a whistleblower may be enriched, if their charges ultimately lead to a settlement. A Qui Tam lawsuit (made by a private citizen on behalf of the government charging fraud or false claims) can yield the whistleblower 15-30% of the governments total recovery of misused funds (LINK Of course, any lawyers involved in the case will also collect their pound of flesh (probably the majority of the reward). If this is true for the Weill Medical College case, the whistleblower and their attorneys may share from $390,000-$780,000.

    I?m not condoning any shenanigans by Weill personnel, but the lines can be a bit fuzzy when the claimant stands to receive substantial reward through their actions. The fact that the claimant (perhaps quided by their attorneys) *contested* the initial September 2007 settlement (that was just re-approved by the judge after review), makes it seem even more likely that the whistleblower and their attorneys were looking for a payday rather than simply bringing to light an alleged misappropriation of taxpayer funds.

    Finally, the Dr. Sarafoglou who is quoted in the article, also used a Qui Tam lawsuit in her case against Weill Medical Center. Weill settled for $4.4M without admission of wrongdoing, and Sarafoglou and her lawyers shared $877,000 (NY Times, Aug 16, 2005, reprinted at: LINK To try to be balanced, the NY Times article referred to in that URL also describes the duress and professional disruption experienced by Dr. Sarafoglou, which has a real value I am sure.

    I appreciate that whistleblowers need protection against retaliation, but I am concerned that the size of the rewards may cause some persons to raise charges that are aimed more at profit than illuminating and redressing unethical behavior. The law firms that seek out these cases are certainly profit motivated, and the firm that represented Sarafoglou has had more than an average share of negative press.

    -A University professor and recipient of federal grant awards.


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