St. Louis University settles “whistle-blower” suit

August 21, 2008  |  Press Releases

St. Louis University, in St. Louis, Missouri, has agreed to pay a sizeable amount to settle a whistle-blower suit accusing the University’s School of Public Health of fraud in connection with federal grants. A former dean of the School of Public Health, Dr. Andrew Balas, initially filed the suit in May 2005 under the federal False Claims Act, alleging that the University had swindled the government by overstating the hours spent by faculty members working on projects funded by grants from the Centers for Disease Control and Prevention. The scheme allowed the school to receive supplemental income from the government for the faculty’s phantom “work.” An investigation of the former dean’s allegations revealed that the School of Public Health had operated similar schemes to extract additional funding from the National Institutes of Health and from the Department of Housing and Urban Development, as well. Further, the school neglected to follow federal requirements to maintain an accurate tracking system for hours worked on federal grant projects. The terms of the settlement provide that the United States will receive a seven-figure payment in exchange for dismissal of the suit. The government will also perform annual audits with increased scrutiny of the University’s participation in federally funded research.

Dr. Balas filed the “whistle-blower” suit under the “qui tam” provision of the federal False Claims Act, allowing a private citizen to institute a claim for fraud on the government’s behalf and to share in any money received. Under that provision, the whistle blower, Dr. Balas, will receive a considerable sum as his share of the recovery.

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