One of the largest qui tam False Claims Act cases regarding federal research grant fraud has faced a recent set back, however the case could be far from over.  The case, which was filed under seal in November 2015 by Joseph Thomas, a former Duke University research biologist, alleges the Duke University Health System’s Pulmonary Division falsified data that was submitted the National Institute of Health (NIH) and the false data formed the basis for over $200 million in federal scientific grant funding.  The allegations only recently became public knowledge when the complaint was unsealed on August 8, 2016.  Although the Department of Justice decided not to intervene in the case, which would have meant taking over primary responsibility in the case’s prosecution and is typically a major goal for qui tam plaintiffs, the case could still advance because the False Claims Act allows the whistleblower to continue prosecuting the case on behalf of the United States.

The lawsuit centers around former Duke clinical research coordinator Erin Potts-Kant and former professor of medicine William Foster, each are named defendants in the case, and alleges a complicated web of research fabrication and systemic cover-ups.  Potts-Kant was hired by Duke University in 2005 and worked in Foster’s research lab.  The proverbial deck of cards began to collapse in 2013, when Potts-Kant was terminated after being arrested on charges of embezzling $14,000 from Duke and the University began a review of her research data.  But, the lawsuit claims that warning signs of Potts-Kant’s research misconduct surfaced prior to the formal investigation.

During her eight-year employment, Potts-Kant authored 38 publications with Foster, a feat that Thomas, the whistleblower, argues was “unusual for her relative youth and inexperience.” Further, the suit alleges that at least three separate investigators, including two within the Duke medical department and a separate investigator at Johns Hopkins University, suspected that Potts-Kant’s data was fabricated.  When confronted with these suspicions, Foster allegedly defended Potts-Kant without checking her original lab data.

After Potts-Kant was terminated, the internal investigation began. The suit alleges that the investigation determined that Potts-Kant, whose research focused on how pollutants affect the body’s airways, would often not expose the test mice to the proper experimental conditions, manipulated the data to match her hypothesis or would not even run the experiments at all.  Thomas further alleges that the investigation found that almost all of Potts-Kant’s data was misleading and replicated experiments had entirely inconsistent results than were published by Potts-Kant.  At this point, in March 2013, the lawsuit alleges senior management at Duke had “actual and specific knowledge of misconduct involving Potts-Kant and the Foster Lab.”

However, the suit further claims that instead of candidly notifying other research partners and the NIH, Duke officials circulated a “script” instructing how to inform co-authors outside of Duke of the situation and encouraged internal researchers to avoid creating a “papertrail” about the issue.  Although, it is claimed that the “script” was misleading and only stated that Potts-Kant was involved in an employment situation and did not disclose the accusations of research misconduct.

Despite eventually issuing publication retractions and corrections, the lawsuit claims that Duke University and other co-defendants did not properly address the issues and used falsified data to obtain nearly $200 million in federal grant money.  Of the $200 million, the suit claims that Duke directly received 49 grants worth $82.8 million from the NIH, the EPA and other agencies “that were directly premised on or arose from the research misconduct of Potts-Kant and/or the Foster lab.”  Thomas also alleges that the false data helped other institutions receive 15 grants worth $120.9 million from NIH because those grants involved using the Duke lab for research tasks.  Perhaps the most substantial allegation, in regard to the intent standards required for False Claims Act liability, is that the suit alleges that Duke University submitted an annual grant update that included research reports based on experiments performed by Potts-Kant and the Foster lab in June 2013; three months after the suit alleges they had substantial and detailed knowledge of the misconduct that occurred.

Although there have been other qui tam cases of mixed success alleging research misconduct, the Duke case is unprecedented in the amount of grant money involved and level of alleged misconduct.  The outcome of the Duke case is far from certain but the case does stand as a cautionary example to other research institutions and demonstrates another industry that could see more False Claims Act cases in the future.

To report fraud, contact Frohsin Barger & Walthall.