Northwestern to Pay $3 Million in Grant-Fraud Case

Northwestern University agreed to pay $2.93 million to resolve allegations of grant fraud by a cancer researcher, federal prosecutors in Chicago said.

The university allegedly allowed Dr. Charles L. Bennett, then a researcher at its Chicago medical campus, to submit false claims under research grants from the National Institutes of Health, Acting U.S. Attorney Gary S. Shapiro said today in a statement.

From those NIH funds, Bennett was allowed reimbursement for professional and consulting services, plus food and travel expenses for himself, friends and family from January 2003 through August 2010, according to a settlement agreement filed today with U.S. District Judge Ruben Castillo in Chicago.

“Allowing researchers to use federal grant money to pay for personal travel, hotels and meals, and to hire unqualified friends and relatives as ‘consultants’ violates the public trust and federal law,” Shapiro said.

Melissa Theis, a former employee at the Robert H. Lurie Comprehensive Care Center in Chicago, filed a whistle-blower lawsuit under the federal False Claims Act against the university and Bennett under seal in 2009.

The settlement portion of the case docket was made public today. Theis will receive $498,100 from the settlement proceeds, according to Shapiro’s statement. The school must pay the settlement within 14 business days.

Myeloma Drugs

The NIH grant was intended to cover research into adverse drug events, multiple myeloma drugs and quality of care for cancer patients, Shapiro said.

Northwestern expressly denied the allegations made by Theis and the U.S., according to the settlement agreement.

Theis’s allegations were “at odds with the university’s commitment to a culture of compliance in the administration of federal research grants,” Al Cubbage, a spokesman for the school, said in an e-mailed statement. The school cooperated in the investigation of the allegations “in an effort to demonstrate their inconsistency with its institutional values.”

The university elected to settle to avoid “protracted litigation,” he said. Northwestern’s main campus is in the Chicago suburb of Evanston.

“We deny the allegations in the complaint,” Bennett’s attorney, James M. Becker of Buchanan Ingersoll & Rooney PC in Philadelphia, said today in a phone interview. The lawyer said he and his client are “actively engaged” in discussions to resolve the matter.

The case is U.S. ex rel. Theis v. Northwestern University, 09-cv-01943, U.S. District Court, Northern District of Illinois (Chicago).

To contact the reporter on this story: Andrew Harris in the Chicago federal courthouse at

aharris16@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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