NORTHWESTERN UNIVERSITY WILL PAY $5.5 MILLION TO RESOLVE
FALSE CLAIMS ACT AND COMMON LAW ALLEGATIONS

WASHINGTON, D.C. — Northwestern University will pay the United States $5.5 million to settle allegations that the school violated the False Claims Act with regard to claims in connection with federally-sponsored medical research grants, the Justice Department announced today. The government alleged that Northwestern misled the United States into paying more money than the Chicago-area school was lawfully entitled to receive.

For example, the government alleged that in completing applications for the National Institutes of Health and other federal agencies grants, Northwestern overstated the percentage of its researchers' work effort that they were able to devote to the grant. The United States also alleged that the university knowingly failed to comply with federal government requirements that a specified percentage of the researchers' effort be devoted to the grant.

"This settlement illustrates the importance to the United States of ensuring that universities and other institutions make proper use of federal research funds," said Assistant Attorney General Robert D. McCallum, Jr., head of the Department's Civil Division.

The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act against Northwestern by Richard Schwiderski, a former employee of the University's Office of Research Sponsored Programs. The suit was filed in the federal court in Dallas, Texas in March 2000, but was later transferred to U.S. District Court for the Northern District of Illinois in Chicago.

As a result of today's settlement, Mr. Schwiderski will receive $907,500 of the total recovery as his statutory award. Under the qui tam provisions of the False Claims Act, a private party can file an action on behalf of the United States and receive a portion of the settlement if the government takes over the case and reaches a monetary agreement with the defendant.

The Justice Department received analytical support in this case from the National Institute of Health's Division of Program Integrity in Rockville, Maryland and the United States Department of Health and Human Services' Office of the Inspector General (HHS-OIG) in St. Paul, Minnesota. The case was investigated by HHS-OIG in Chicago, Illinois. The case was handled by the Civil Division of the Department of Justice with assistance from the U.S. Attorney's Office in Chicago.

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