Duke University Agrees to Pay U.S. $112.5 Million to Settle False Claims Act Allegations

Duke University has agreed to pay the government $112.5 million to resolve claims alleging the University violated the False Claims Act by submitting applications and progress reports that contained falsified research on federal grants to the National Institutes of Health (NIH) and to the Environmental Protection Agency (EPA).

Alleged Grant Fraud

Duke University receives hundreds of grants each year via the millions of dollars in funding provided to it from NIH and the EPA. Between 2006 and 2008, Duke is alleged to have knowingly submitted and caused to be submitted claims to the NIH and the EPA that contained falsified or fabricated data or statements in thirty grants. Specifically, it is believed that Duke falsified data results and research related to a mice study concerning lung function conducted in its Airway Physiology Laboratory. As a result of this data, the NIH and the EPA paid out grant funds they otherwise would not have. According Assistant Attorney General Jody Hunt for the Department of Justice’s Civil Division, “the resources utilized by NIH and EPA to fund important research and clinical programs across the nation are limited.”

Non-Intervened Settlement Achieved By Whistleblower and Private Counsel

The allegations against Duke were originally brought by a former Duke employee, pursuant to the False Claims Act’s qui tam provisions. The False Claims Act prohibits organizations, like Duke University, and individuals from defrauding government programs. Pursuant to the Act’s qui tam provisions, a whistleblower, also known as a “relator”, with knowledge of fraud against the government may file a civil suit on behalf of the United States. The government can then decide whether it wants to join and proceed with the suit.

In this case, the government declined to join, or “intervene,” in the case and the whistleblower and their counsel elected to proceed in this case and ultimately achieved this significant settlement.   When the government intervenes in a FCA case, the whistleblower who originally brought the suit is entitled to receive 15-25% of the government’s recovery; when the government does not intervene in a case, the whistleblower is entitled to 25-30% of the government’s recovery.  In this case, the relator is set to receive $33,750,000 from the $112.5 million recovered by the United States.  The relator in this case was represented by John Thomas, formerly of Gentry Locke LLP in Roanoke, Virginia, and now of the law firm of Healy Hafemann Magee based in Savannah, Georgia.

Frohsin Barger & Walthall congratulates and thanks Mr. Thomas and his law firms for their brave pursuit of this case.

Read the full DoJ press release here.