Duke University pays $112.5 million in fake research case sparked by whistleblower

(Reuters) - Duke University agreed to pay $112.5 million to settle claims by a whistleblower that a former research technician knowingly submitted fake data in applications for federal research grants, the U.S. Department of Justice said on Monday.

The accord resolves claims by a former Duke laboratory research analyst who said the Durham, North Carolina-based university knew that Erin Potts-Kant used fraudulent data to obtain grants from the National Institutes of Health, the Environmental Protection Agency and other agencies.

False claims were submitted in connection with 30 grants, starting in 2006, causing agencies to award funds that they would not otherwise have paid, the Justice Department said.

“We expect Duke researchers to adhere always to the highest standards of integrity, and virtually all of them do that with great dedication,” Duke President Vincent Price said in a statement.

“When individuals fail to uphold those standards, and those who are aware of possible wrongdoing fail to report it, as happened in this case, we must accept responsibility, acknowledge that our processes for identifying and preventing misconduct did not work, and take steps to improve,” he added.

Duke said it discovered the fraud after Potts-Kant was arrested in 2013 for embezzling money from the university.

It said Potts-Kant later pleaded guilty to two counts of forgery and paid restitution.

At least 16 of Potts-Kant’s research papers have been retracted, according to the website Retraction Watch.

Joseph Thomas, the whistleblower, said some of Potts-Kant’s work related to research by her supervisor, Michael Foster, a former professor of medicine, involving the testing of mice.Thomas will receive $33.75 million, or 30 percent, from the settlement. The False Claims Act lets whistleblowers sue on behalf of the federal government and share in recoveries.

“Taxpayers expect and deserve that federal grant dollars will be used efficiently and honestly,” Matthew Martin, the U.S. Attorney for the Middle District of North Carolina, said in a statement.

Lawyers for Thomas had no immediate comment. A lawyer for Foster declined to comment. Lawyers for Potts-Kant did not immediately respond to requests for comment.

Duke said it is taking several steps to upgrade research integrity and accountability in response to the settlement.

Reporting by Jonathan Stempel in New York; Editing by Cynthia Osterman and Dan Grebler