Federal Investigation of Foreign Influence on Domestic Research

The National Institutes of Health (NIH) and Federal Bureau of Investigation (FBI) are teaming up to investigate the veiled influence of foreign entities that are involved with United States domestic research. The implications could be vast; with the potential to dismantle research projects and lead to significant civil and/or criminal investigations.

The NIH and FBI are acting upon the suspicion that foreign entities are covertly funding and coordinating with domestically funded research; thereby obtaining confidential grant application information, shaping research funding decisions, duplicating our studies, usurping our findings and intellectual property, as well as perhaps illegally collecting state secrets and classified scientific information.

The active participation of the FBI suggests a very serious criminal component to these investigations. 60 Minutes Overtime recently ran a story regarding Chinese-born American Xiaoxing Xi, a chair at Temple University physics department, who was wrongly arrested at gunpoint for economic espionage. Dr. Xi faced an indictment and potentially 80 years incarceration; it took him months and hundreds of thousands of dollars in legal fees to clear his name. Click here for 60 Minutes Overtime’s full story on Dr. Xi.

We can expect that the joint NIH/FBI investigations will lead to federal and institutional administrative investigations, civil lawsuits, qui tam (or “whistle-blowers”) lawsuits, and potentially criminal charges.

The federal (ex., NIH) and institutional (ex., university level) administrative investigations could prove to be very costly to research institutions, potentially leading to the termination of grants and the debarment of researchers and institutions. The investigators will certainly question targeted researchers and institutions regarding any forms that they filed in relation to their research grants, including: annual conflict disclosure forms, annual progress reports, and whether any foreign research collaborator listed on the published study provided any covert funding or collaboration. Intentionally filing false documentation can lead to civil and criminal liability.

For example, a qui tam or whistle-blower action could be brought under the False Claims Act31 U.S.C. § 3729 et seq., thereby subjecting the researchers and institution to the risk of liability for treble (triple) damages. Such an action is initially filed under seal so that the Justice Department can conduct an investigation and eventually determine whether or not they want to assume the role of plaintiff with respect to the litigation. The whistle-blower (or “relator”) can share in the recovery.

The vast criminal implications include tax fraud and tax evasion, wire fraud (18 U.S.C. § 1343), mail fraud (18 U.S.C. § 1341), and espionage related offenses. The failure to disclose a foreign bank account on a tax return can be charged as tax fraud. The failure to disclose income from a foreign entity can be charged as tax fraud and/or evasion. Intentionally filing false forms, such as annual conflict disclosure forms and annual progress reports, can be charged a wire or mail fraud. Sharing confidential or classified information with a foreign entity could form the basis for espionage charges.

Any researcher or research institution that has concerns about their prior practices and disclosures would be well advised to immediately contact qualified counsel and discuss preemptive corrective measures.

Stay tuned, as I will be providing updated information as this investigation progresses.  For any questions regarding the legal matters covered in this investigation, please contact me at bcovert@lglaw.com.

For additional details on this investigation, including comment from NIH Director Francis Collins, click here.