Lehigh University Agrees to Pay $200,000 Settlement to Resolve False Claims Act Allegations Arising from Convicted Professor’s Grant Fraud

(Excerpt from the Department of Justice release)

  • United States Attorney William M. McSwain announced that Lehigh University in Bethlehem, Pennsylvania, has agreed to pay $200,000 and abide by compliance requirements in connection with any application seeking federal grant funds or cooperative agreements with any federal agency.
  • The settlement agreement resolves allegations under the False Claims Act relating to Small Business Innovation Research (“SBIR”) grants awarded to ArkLight, a company owned by Dr. Yujie Ding, a former Lehigh University professor.
  • Between 2004 and 2013, Lehigh University employed Dr. Yujie Ding, first as an Associate Professor and then as a Professor. During that time, Ding used a sole proprietorship he created called ArkLight to apply for SBIR program research grants funded by the National Aeronautics and Space Administration (“NASA”), the United States Department of the Army, the United States Air Force, and the National Science Foundation (“NSF”). ArkLight received grants totaling $2,740,000.
  • In each proposal, Yuliya Zotova, Ding’s wife, was listed as ArkLight’s principal investigator, the person designated to lead the scientific and technical effort.
  • Under the applicant programs, ArkLight was to complete a majority of the research work. In reality, and unbeknownst to Lehigh University, none of the work was completed by ArkLight. Instead, all of the work was done by graduate students and others working in Ding’s university laboratory, under Ding’s supervision. The United States contends that, at the time, Lehigh University had an inadequate compliance program in place to detect and prevent Ding’s fraud. Although the work was done at Lehigh University, the University was ineligible for payment because there was no small business serving as the primary contractor. As the nominal subcontractor, Lehigh was paid over $1 million.