The Cleveland Clinic Foundation has agreed to pay the U.S. $7.6 million to resolve allegations that it violated the False Claims Act, the Justice Department announced May 17.
The settlement resolves allegations of undisclosed foreign sources of funding on National Institutes of Health grant applications and reports.
Prosecutors alleged that the Cleveland Clinic made false statements to NIH 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," the Justice Department said.
Prosecutors also alleged that some of the submissions made to NIH were made by Cleveland Clinic Foundation employees who were inappropriately given access to NIH's online grant reporting platform.
Cleveland Clinic, in a statement shared with Becker's May 17, said the health system "does not agree with the allegations made by the U.S. Attorney's office. However, in order to avoid costly and time-consuming litigation, we have agreed to a settlement, under which no admissions are made."
The case pertains to Qing Wang, PhD, a former Cleveland Clinic researcher who was arrested in May 2020 and charged with failing to disclose his ties to a Chinese government program in applications to NIH.
Dr. Wang "was terminated by Cleveland Clinic in 2020 for serious misconduct after not fulfilling his obligations to comply with hospital policies and procedures. As a researcher funded by the National Institutes of Health, Dr. Wang was also required to follow NIH guidance and regulations in his work with that agency. Dr. Wang repeatedly violated his obligations to both Cleveland Clinic and the NIH," Cleveland Clinic's statement said.
According to the Justice Department, Dr. Wang and his research group received more than $3.6 million in grant funding from NIH.
Cleveland Clinic's statement said Dr. Wang committed multiple violations of its policies over many years, including "concealing his receipt of millions of dollars of research funding in China and failing to disclose all of his positions in China. Among other misconduct, he violated the hospital's conflict of interest disclosure rules and other requirements intended to promote transparency. Any forms submitted to NIH by the Cleveland Clinic relating to Dr. Wang’s grants were based on information supplied by Dr. Wang, information the Cleveland Clinic did not know at the time was false."
NIH questioned Cleveland Clinic about Dr. Wang's activity in China, and the health system collected and provided information to NIH, and contacted the Justice Department as it learned more about Dr. Wang's activities in China, the statement said.
Dr. Wang was charged with false claims and wire fraud in 2020, and the charges were dropped in 2021.
His attorney in that case, Peter Zeidenberg, told cleveland.com that the charges were dropped due to lack of evidence of wrongdoing.
"The research institutions, their first reaction, is to blame the researcher because they are terrified of losing their funding from agencies like the National Institutes of Health," Mr. Zeidenberg told the publication.
"Dr. Wang didn't violate any (health agency) policies on his grant applications. He never had any intentions to hide anything," he added.
Mr. Zeidenberg also said that Dr. Wang has returned to China.
According to the Justice Department, in addition to the $7.6 million settlement, NIH has imposed specific award conditions on Cleveland Clinic Foundation grants for a one-year period; and the foundation must develop a corrective action plan, create a mandatory training program, and develop an improvement plan for its internal controls.
Cleveland Clinic's statement said the health system "continue[s] to work cooperatively with NIH to strengthen our research processes and remain a good steward of the federal research funds entrusted to our organization. Every day our researchers are advancing lifesaving and enhancing treatments with the help of those funds."