A Columbia biotech company has paid the U.S. government nearly $1 million to settle claims that its officials submitted false grant progress reports.

Advanced BioNutrition Corporation and its former chief executive officer, David Kyle, paid the federal government $934,000, stemming from violations of the False Claims Act, federal prosecutors said Thursday. 

“Anyone who participates in government funded research must truthfully and accurately report the results of that research,” Maryland U.S. Attorney Rod Rosenstein said in a statement. “Companies and individuals that misrepresent results in order to obtain government funding undermine the integrity of the government grant process.”

The settlement resolves a lawsuit brought by a whistleblower, Albert Cunniff, Jr., in 2007 under the False Claims Act, which permit private citizens with knowledge of fraud against the government to bring a lawsuit on behalf of the United States and to share in any recovery. 

Under the civil settlement, Cunniff will receive $105,275 out of the recovery. 

The Columbia company was awarded the first phase of a National Science Foundation Small Business Innovation Research grant in February 2005 to develop technology to micro-encapsulate probiotic bacteria into particles. 

In January 2006, the company submitted a grant proposal to receive a second phase of funding. In March 2006, the foundation awarded the Columbia company the second phase of the grant based upon representations in the company’s proposal about the results obtained during the first phase of research. 

But Advanced BioNutrition Corporation made “material misrepresentations and omitted critical information” in a second phase proposal about the results obtained during the first phase, prosecutors said. 

Additionally, after the second phase of money was awarded, the company made misrepresentations in interim and final reports about the progress it obtained in its second phase work, prosecutors said. 

Both the company and Kyle have denied the allegations.

But as part of the settlement, the company agreed to a five-year “Compliance Integrity Agreement,” which includes auditing and the hiring of a compliance officer, while Kyle agreed to be excluded for a period of five years from all federal procurement programs.

— Luke Broadwater

---

user comments (0)