Education & Research Fraud
Qui tam claims protect deserving recipients of grants and loans.
Government grants and loans are essential to the pursuit of groundbreaking research efforts and individual educational endeavors — and the government needs and wants to know when fraudulent actions are diverting funds from deserving recipients. Persons who are aware of fraudulent grant claims may be eligible to collect a reward from the government if they are able to successfully bring about a qui tam whistleblower lawsuit against the parties responsible.
Education and student loan fraud
Every year, the Department of Education makes billions of treasury dollars available to institutions to help students pay for higher education at public, private nonprofit, and private for-profit schools. To qualify for these funds, however, students and schools must both satisfy certain eligibility requirements. Cases of student loan fraud often involve institutions of higher learning making false statements to the Department of Education in order to meet these requirements.
The False Claims Act has been used to recover millions of tax dollars from educational programs and institutions that use fraudulent marketing practices or deceptive recruitment tactics, improperly and aggressively recruit unqualified students, misrepresent compliance and student data to the Department of Education, and improperly retain unqualified students in order to continue requesting loans. Recently, a number of for-profit colleges, including the University of Phoenix and Kaplan, have been pursued for enrolling and therefore, enabling, otherwise ineligible students to qualify for federal student loans.
Examples of higher-education fraud actionable under the False Claims Act involve:
Fraudulent grant claims for research programs
Universities, nonprofit organizations, and hospitals often depend on government-issued grants to conduct important research for the common good on a wide variety of topics. Unfortunately, grant recipients sometimes misuse these funds.
Familiar areas of grant funding involve research at academic medical centers, hospitals, and other institutions. At academic medical centers, for example, federal payments for research overhead, called indirect payments, total tens of millions of dollars a year. Inflated costs often violate the provisions of the federal grant applications that the government approved. In a recent qui tam case, the National Institutes of Health (NIH) provided Cornell’s Weill Medical College a five-year, $23 million grant to study a variety of children’s diseases. The federal government learned of fraud through a whistleblower and filed a lawsuit against Cornell claiming that the university had been awarded federal funding for research that never happened. Additionally, Cornell billed NIH for nurses who were supposed to focus exclusively on pediatric research yet were routinely at work treating regular patients, and falsified the grant application by including the salaries of phantom nurses to inflate its research costs. The university ultimately paid a $4.4 million settlement to the government.
Examples of government fraud by researchers:
- Paying for inflated overhead expenses, such as salaries or expenses for another project or other work
- Overstating expenses and misdirecting money
- Making false grant claims or misrepresentations on grant applications
- Failing to fully disclose funding sources
- Making false statements in the administration of grant money
- Overstating success to receive additional payments
How Waters & Kraus can help whistleblowers
With a national presence and in-depth experience fighting fraud against the government, Waters & Kraus, LLP, provides aggressive representation of whistleblowers in qui tam actions and related complaints. The firm currently represents whistleblowers seeking to recover funds on behalf of the federal and state governments in a variety of cases, which may involve defendants such as large pharmaceutical companies, government contractors, school district contractors, and hospice and nursing home care providers.
To learn more about qui tam representation at Waters & Kraus, or to have one of our attorneys
review your potential case, email us
or call 800.226.9880.