Feds Vigorously Investigating NIH-Funded Research Institutions and Investigators under False Claims Act

Feb 29, 2020 | China, Department of Justice, Espionage, False Claims Act, Grants, NIH

Feds Vigorously Investigating NIH-Funded Research Institutions and Investigators under False Claims Act

The Department of Justice (DOJ) recently announced that it reached a $5.5 million settlement with a biomedical research institute that received NIH grant funding—the Van Andel Research Institute (VARI) to resolve allegations that it violated the False Claims Act (FCA) by failing to disclose Chinese government grants that funded two researchers. The DOJ also recently charged a Harvard professor and two Chinese nationals in cases involving intellectual property theft or false claims. Tensions continue to build throughout major academic research centers as connections to China are scrutinized by the federal government.


By early 2018 the NIH was proactively warning grantee institutions around the nation about the rules while initiating investigations into nearly 200 specific scientists and dozens of institutions. The government had specific concerns that these people and organizations were running afoul of the law. Recent settlements represent an intensification of enforcement by the federal government with a specific focus on the FCA. The government will proactively pursue matters involving undue foreign influence affecting a research center’s oversight of the NIH-originated funds and the associated scientists conducting the research.

What about the FCA?

This law empowers the government to go after treble damages against any party that make or submit “false claims” to the government or make “false statement” that ultimately lead to a submission of false claims according to 31 U.S.C §§ 3729 et seq. Now the federal government has signaled it will use this legal mechanism to purse the FCA remedy to go after and recover grant funding plus multipliers for damages associated with the failure to disclose the association with foreign research funding during the NIH grant or renewal process reported JDSupra.®

Government Statement

According to a recent Department of Justice (DOJ) press release, the DOJ’s China Initiative reflects the strategic priority of countering Chinese national security threats and reinforces the President’s overall national security strategy. The federal government seeks to identify and prosecute any and all engaged in trade, secret theft, hacking, and economic espionage and overall protect the critical infrastructure against external threats including foreign direct investment, supply chain threats, and the foreign agents seeking to influence the American public and policymakers without proper registration.

Recent Actions

The DOJ recently announced today that the Chair of Harvard University’s Chemistry and Chemical Biology Department and two Chinese nationals have been charged in connection with aiding the People’s Republic of China. They include the following:

Dr. Charles Lieber, Chair of the Department of Chemistry and Chemical Biology, Harvard University was arrested recently and charged by criminal complaint with one count of making a materially false, fictitious, and fraudulent statement. Lieber appeared before Magistrate Marianne B. Bowler in federal court in Boston, Massachusetts.

Yangqing Ye, 29 years old and a Chinese national, was charged in an indictment today with one count each of visa fraud, making false statements, acting as an agent of a foreign government, and conspiracy. He is currently in China.

Zaosong Zheng, 30, a Chinese national, was arrested on Dec. 10, 2019, at Boston’s Logan International Airport and charged with attempting to smuggle 21 vials of biological research to China. TrialSite News covered this incident. Since them, Mr. Zheng has been indicted on one count of smuggling goods from the United States and one count of making false, fictitious, or fraudulent statements. He continues to be detained in the United States.


Federal authorities such as Health and Human Services (HHS), Office of Inspector General (OIG), and the Federal Bureau of Investigation (FBI), not to mention the Department of Justice (DOJ), are cooperating to take on the perceived growing threat of potential undue foreign influence in NIH-funded research. Consequently, grantee institutions must ensure effective adherence to policies and procedures to comply with NIH requirements for truthful and accurate submissions involving any financial conflicts of interest, other support, and foreign components disclosures in grant submissions throughout the award period. Federal authorities are utilizing the FCA as well as additional tools that appear to go beyond the more customary responses for noncompliance with NIH policy, procedure, and rules—e.g., suspension or termination of the grant.

Call to Action: Follow the link to JDSupra® for a deeper review of the current trends in this area by law firm King & Spalding.

Source: JDSupra


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