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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&#8217;s office regarding
the recent settlement involving Yale University and allegations regarding the
mismanagement of federal grant funds.&nbsp; This settlement, the actions of the
U.S. Attorney&#8217;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>&nbsp;</o:p></span></p>

<p class=MsoNormal><span style='font-size:12.0pt;color:#1F497D'>Yale University&#8217;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>&nbsp;</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>&nbsp;</o:p></span></p>

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  <p class=MsoNormal><span style='font-size:12.0pt;color:#1F497D'>Bruce&nbsp;Morgan</span><span
  style='font-size:12.0pt;color:#1F497D'><o:p></o:p></span></p>
  <div style='mso-element:para-border-div;border:none;border-bottom:solid windowtext 1.0pt;
  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>
  </div>
  <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>&nbsp;</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 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp; </b></span><span
  style='font-size:12.0pt;font-family:"Times New Roman","serif";color:black'><o:p></o:p></span></p>
  </td>
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  <p class=MsoNormal><span style='font-size:12.0pt;font-family:"Times New Roman","serif"'><o:p>&nbsp;</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'>&nbsp;<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&nbsp; 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.&nbsp; 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 &#8220;allocable&#8221;
      costs, which are&nbsp; costs that relate to the specific objectives of
      that grant project.&nbsp; 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.&nbsp; 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.&nbsp; 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.&nbsp; 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.&nbsp; 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.&nbsp; 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.&nbsp; The only salary received by these researchers during
      the summer was the result of the effort they charged to federal
      grants.&nbsp; 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.&nbsp; 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'>&#8220;This settlement sends a clear message that the
      regulations applicable to federally-funded research grants must be
      strictly adhered to,&#8221; 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&#8217;s investigation, which began
      with the service of multiple investigative subpoenas on the university in
      2006.&nbsp; 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.&nbsp; 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'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <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&#8217;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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<p class=MsoNormal><o:p>&nbsp;</o:p></p>

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