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<p class=MsoNormal><span style='font-size:12.0pt;color:#1F497D'>I am
distributing this press release from the US Attorney’s office regarding
the recent settlement involving Yale University and allegations regarding the
mismanagement of federal grant funds. This settlement, the actions of the
U.S. Attorney’s Office and the Offices of Inspector General at the
National Science Foundation, Department of Health and Human Services,
Department of Defense, Department of Energy and NASA make clear that the
federal government expects grantees to adhere to the policies and regulations
applicable to the management and administration of federal awards.<o:p></o:p></span></p>
<p class=MsoNormal><span style='font-size:12.0pt;color:#1F497D'><o:p> </o:p></span></p>
<p class=MsoNormal><span style='font-size:12.0pt;color:#1F497D'>Yale University’s
press release regarding the settlement, its cooperation in the investigation
and the corrective actions that it took during the course of the investigation
is available at <a href="http://opa.yale.edu/news/article.aspx?id=6302">http://opa.yale.edu/news/article.aspx?id=6302</a>.
<o:p></o:p></span></p>
<p class=MsoNormal><span style='font-size:12.0pt;color:#1F497D'><o:p> </o:p></span></p>
<p class=MsoNormal><span style='font-size:12.0pt;color:#1F497D'>Please
circulate this message broadly within your unit to anyone who is involved in
the management and/or administration of sponsored awards, including principal
investigators and co-principal investigators.<o:p></o:p></span></p>
<p class=MsoNormal><span style='font-size:12.0pt;color:#1F497D'><o:p> </o:p></span></p>
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<p class=MsoNormal><span style='font-size:12.0pt;color:#1F497D'>Bruce Morgan</span><span
style='font-size:12.0pt;color:#1F497D'><o:p></o:p></span></p>
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padding:0in 0in 1.0pt 0in'>
<p class=MsoNormal style='border:none;padding:0in'><span style='font-size:
12.0pt;color:#1F497D'>Assistant Vice Chancellor for Research<o:p></o:p></span></p>
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<p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><span
style='font-size:10.0pt;font-family:"Arial","sans-serif";color:#1F497D'><o:p> </o:p></span></p>
<p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><span
style='font-size:10.0pt;font-family:"Arial","sans-serif";color:black'>United
States Attorney<br>
District of Connecticut<br>
<br>
PRESS RELEASE<br>
<b>December 23, 2008 </b></span><span
style='font-size:12.0pt;font-family:"Times New Roman","serif";color:black'><o:p></o:p></span></p>
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<p class=MsoNormal align=center style='mso-margin-top-alt:auto;mso-margin-bottom-alt:
auto;text-align:center'><b><span style='font-size:24.0pt;font-family:"Times New Roman","serif";
color:black'> <o:p></o:p></span></b></p>
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<p class=MsoNormal align=center style='mso-margin-top-alt:auto;
mso-margin-bottom-alt:auto;text-align:center'><b><span style='font-size:
10.0pt;font-family:"Arial","sans-serif";color:black'>YALE UNIVERSITY TO
PAY $7.6 MILLION TO RESOLVE FALSE CLAIMS ACT AND COMMON LAW ALLEGATIONS </span></b><b><span
style='font-size:24.0pt;font-family:"Times New Roman","serif";color:black'><o:p></o:p></span></b></p>
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<p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:
auto'><span style='font-size:12.0pt;font-family:"Times New Roman","serif";
color:black'><br>
</span><span style='font-size:10.0pt;font-family:"Arial","sans-serif";
color:black'>Nora R. Dannehy, Acting United States Attorney for the
District of Connecticut, today announced that YALE UNIVERSITY has entered
into a civil settlement agreement with the Government in which it will
pay $7.6 million to resolve allegations that it violated the False Claims
Act and the common law in the management of federally-funded research
grants awarded to the university between January 2000 and December 2006.</span><span
style='font-size:12.0pt;font-family:"Times New Roman","serif";color:black'><o:p></o:p></span></p>
<p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:
auto'><span style='font-size:10.0pt;font-family:"Arial","sans-serif";
color:black'>Acting U.S. Attorney Dannehy explained that the grant awards
were made by approximately 30 federal agencies and entities, including
the Department of Health and Human Services, the National Science
Foundation, the Department of Energy, the Department of Defense, and the
National Aeronautics and Space Administration. These five agencies
provided approximately 94 percent of the almost $3 billion in
federal grant funding to YALE UNIVERSITY during the time period at issue.<o:p></o:p></span></p>
<p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:
auto'><span style='font-size:10.0pt;font-family:"Arial","sans-serif";
color:black'>The investigation focused on allegations involving two types
of mischarges to federal grants. Both types of mischarges arose as
violations of the basic principle that recipients of federal grants are
allowed to charge to each grant account only “allocable”
costs, which are costs that relate to the specific objectives of
that grant project. The first allegation involved cost transfers
and the requirement that costs transferred to a federal grant account
must be allocable to that particular grant account. The settlement
resolves allegations that some YALE UNIVERSITY researchers at times
improperly transferred charges to a federal grant account to which those
charges were not allocable. Researchers allegedly were motivated to
carry out these wrongful transfers when the federal grant was near its
expiration date and they needed to spend down the remaining grant
funds. Federal regulations require that unspent grant funds be
returned to the Government.<o:p></o:p></span></p>
<p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:
auto'><span style='font-size:10.0pt;font-family:"Arial","sans-serif";
color:black'>The second allegation involved salary charges and the
requirement that charges to federal grant accounts for researcher time
and effort must reflect actual time and effort spent on a particular
grant. The Government alleges that some researchers at YALE
UNIVERSITY at times submitted time and effort reports, for summer salary
paid from federal grants, that wrongfully charged 100 percent of their
summer effort to federal grants when, in fact, the researchers expended
significant effort on unrelated work. Researchers allegedly were
motivated to carry out these wrongful salary charges by the fact that
they are not paid their academic-year salary by YALE UNIVERSITY during
the summer. The only salary received by these researchers during
the summer was the result of the effort they charged to federal
grants. Absent the alleged grant mischarges, the researchers would
not have been paid.<o:p></o:p></span></p>
<p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:
auto'><span style='font-size:10.0pt;font-family:"Arial","sans-serif";
color:black'>The $7.6 million payment comprises two components: $3.8
million in actual damages for the false claims, and $3.8 million assessed
as penalties for the false claims. The False Claims Act provides
for up to treble damages and penalties of $5,500 to $11,000 per false
claim submitted to the Government.<o:p></o:p></span></p>
<p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:
auto'><span style='font-size:10.0pt;font-family:"Arial","sans-serif";
color:black'>“This settlement sends a clear message that the
regulations applicable to federally-funded research grants must be
strictly adhered to,” stated Acting United States Attorney Dannehy.<o:p></o:p></span></p>
<p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:
auto'><span style='font-size:10.0pt;font-family:"Arial","sans-serif";
color:black'>Acting U.S. Attorney Dannehy also noted that YALE UNIVERSITY
cooperated fully in the Government’s investigation, which began
with the service of multiple investigative subpoenas on the university in
2006. Throughout the investigative period, YALE UNIVERSITY also
made extensive efforts to significantly improve its management of federal
grants.<o:p></o:p></span></p>
<p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:
auto'><span style='font-size:10.0pt;font-family:"Arial","sans-serif";
color:black'>As a result of the settlement, there will be no lawsuit
filed against YALE UNIVERSITY regarding the more than 6,000 grants
covered by the settlement agreement. In entering into the
settlement, YALE UNIVERSITY did not admit liability and the agreement
indicates that the parties settled this matter to avoid the delay,
uncertainty, and expense of litigation.<o:p></o:p></span></p>
<p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:
auto'><span style='font-size:10.0pt;font-family:"Arial","sans-serif";
color:black'>The settlement resulted after a lengthy investigation
conducted by the Department of Health and Human Services, Office of the
Inspector General; the National Science Foundation, Office of the
Inspector General; the Department of Energy, Office of the Inspector
General; the Defense Criminal Investigative Service; the Department of
the Army, Criminal Investigation Command; the Defense Contract Audit
Agency; the National Aeronautics and Space Administration, Office of the
Inspector General; and the Federal Bureau of Investigation.<o:p></o:p></span></p>
<p class=MsoNormal><span style='font-size:12.0pt;font-family:"Times New Roman","serif";
color:black'> <o:p></o:p></span></p>
<p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:
auto'><span style='font-size:10.0pt;font-family:"Arial","sans-serif";
color:black'>The matter was handled within the U.S. Attorney’s
Office by Assistant U.S. Attorneys William A. Collier, John B. Hughes and
David J. Sheldon, and Auditor Susan N. Spiegel</span><o:p></o:p></p>
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