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Duke’s Fraud Trouble Is a Wake-up Call for Research Compliance

March 28, 2019, 9:16 AM

Duke University’s whopping $112.5 million settlement for faking research data is a warning shot to others to ensure their data stand up to scrutiny.

“This case should send a signal to researchers and the institutions in which they work that they better get their federal grants in order,” said F. Lisa Murtha, who has specialized in research compliance for more than three decades and is a senior managing director for the consulting firm Ankura.

The settlement, announced March 25, is a sign that the HHS and Justice Departments are scrutinizing the integrity of federal grants more intensely. In the Duke case, a whistleblower claimed researchers and the university deliberately submitted false data about their research to the National Institutes of Health, which were linked to about $200 million in federal grant money. While the Justice Department settles billions of dollars in health-care related fraud and false claims cases a year, research fraud cases remain a rarity.

“May this serve as a lesson that the use of false or fabricated data in grant applications or reports is completely unacceptable,” Matthew G.T. Martin, U.S. Attorney for the Middle District of North Carolina, said in a statement when the settlement was announced.

Better Auditing, Monitoring

Organizations must audit and monitor their federal awards closely to ensure that all funds can be accounted for as in compliance with federal grant-making rules. This should be the number one priority for developing research compliance work plans, Murtha said.

Universities can do more to manage data provenance and improve the checks in place to ensure the integrity of data coming out of their labs, said John R. Thomas Jr. an attorney at Healy Hafemann Magee and the brother of whistleblower Joseph M. Thomas.

“The most important take-away from this settlement for institutions is that the potential for liability under the False Claims Act in the context of research misconduct cases cannot be ignored,” Kate Gallin Heffernan, a research attorney with Verrill Dana LLP, said.

While the False Claims Act has previously been applied in grant fraud cases, it has never been applied in the scientific grant context on this scale, Thomas said. In whistleblower cases, the settlement amount can triple.

The settlement will remind researchers of the importance of adhering strictly to procedures governing allegations of research misconduct, said Paul S. Thaler, an Cohen Seglias Pallas Greenhall & Furman PC.

“I know Duke to be one of the stronger universities in handling research misconduct matters,” he added. “This shows it can happen anywhere.”

To contact the reporter on this story: Jeannie Baumann in Washington at jbaumann@bloomberglaw.com

To contact the editors responsible for this story: Fawn Johnson at fjohnson@bloomberglaw.com; Andrew Childers at achilders@bloomberglaw.com