Cleveland Clinic to Pay Over $7 Million to Settle Allegations of Undisclosed Foreign Sources of Funding on NIH Grant Applications and Reports

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The Cleveland Clinic Foundation (CCF) has agreed to pay $7,600,000 to resolve allegations that it violated the False Claims Act (FCA) by submitting to the National Institutes of Health (NIH) federal grant applications and progress reports in which CCF failed to disclose that a key employee involved in administering the grants had pending and/or active financial research support from other sources.

The settlement resolves allegations that CCF made false statements to NIH, a component of the Department of Health and Human Services (HHS), in connection with three federal grant awards. Despite NIH requirements to do so, CCF repeatedly failed to disclose that the employee who it designated as the Principal Investigator on each grant had pending and/or active grants from foreign institutions that provided financial assistance to support the employee’s research and already obligated that employee’s research time. CCF falsely certified that the grants submissions were true and accurate.

NIH requires full transparency in applications and throughout the life of the grants it awards. This includes a requirement that grant applicants disclose all sources of research support, from any source, on grant applications and on follow-up documents relating to grant awards. NIH uses this information to determine if the applicant has the time necessary to allocate to the proposed research project, and if the research proposal has other sources of funding that are duplicative. It also assists NIH in determining if an applicant’s financial interests may affect its objectivity in conducting research.

The settlement also resolves allegations that CCF violated NIH password policies by permitting CCF employees to share passwords. Some of the false submissions wherein CCF failed to disclose the Principal Investigator’s foreign grant support were made by CCF employees who were inappropriately given access to NIH’s online grant reporting platform.

“Each year, NIH awards federal grants to support research to improve public health, but those funds are limited and the grant process is competitive. Every entity or person who seeks such grant money must strictly play by the rules. As stewards of taxpayer dollars, our Office takes seriously its responsibility of ensuring that grant recipients fully and accurately report all required information to NIH so that it may properly award its limited funds to deserving institutions,” said U.S. Attorney Rebecca C. Lutzko for the Northern District of Ohio. “Today’s settlement illustrates the importance of being truthful at every stage of the grants process.”

In addition to the $7.6 million settlement, NIH has imposed Specific Award Conditions on all CCF’s grants for a one-year period. Federal regulations allow NIH to impose Specific Award Conditions on grant recipients, including on recipients that do not comply with the terms of a federal award. In this case, NIH is requiring a high-level CCF employee to personally attest to the truth, completeness, and accuracy of all “other grant support” information CCF provides to NIH. CCF must also develop a corrective action plan that includes an assessment of internal controls related to other grant support and foreign-component reporting; create a mandatory training program addressing requirements for disclosing other grant support, research security, and cyber security; and develop an improvement plan for its internal controls, ensuring that CCF has oversight at the institutional level to confirm that the information its Principal Investigators disclose is true, complete, and accurate, among other requirements. The Specific Award Conditions will begin Oct. 1, 2024, and remain in effect through Sept. 30, 2025, or until NIH is satisfied that CCF has successfully completed the Corrective Action Plan.

“The accuracy of information reported in applications and other documentation related to federal grants is critical to ensuring that these limited funds are utilized in the most efficient and effective manner and that the integrity of the application process is upheld,” said Special Agent in Charge Mario M. Pinto, of the United States Department of Health and Human Services Office of Inspector General (HHS-OIG). “Our agency is committed to ensuring that those who submit false statements in grant applications are identified and investigated, in cooperation with our federal law enforcement partners.”

A cooperative effort between HHS-OIG, the FBI, and the U.S. Attorney’s Office for the Northern District of Ohio resulted in the resolution obtained in this matter. Assistant United States Attorneys Michelle Heyer and Elizabeth Berry investigated the matter on behalf of the U.S. Attorney’s Office.

This settlement illustrates the government’s emphasis on combating fraud. If you have information regarding potential fraud, waste, abuse, or mismanagement in the U.S. Department of Health and Human Services’ programs, please file a report with OIG's Hotline. You can submit your tip or complaint online at https://oig.hhs.gov/fraud/report-fraud/ or contact the OIG Hotline at 1-800-447-8477. The claims resolved by the settlement are allegations only and there has been no determination of liability.