A New York man, his wife and brother were arrested by federal agents on charges related to a $9 million research grant fraud scheme, a government watchdog reported Monday.
Bin “Ben” Wen, his wife Peng “Jessica” Zhang and brother Haifang “Harry” Wen were arrested Feb. 24 and charged with conspiracy, false claims and money laundering surrounding a scheme to obtain federal grants and contracts through fraud, according to the Department of Transportation inspector general. The three each face up to 30 years in prison and a $1 million fine.
“As charged, the defendants took money intended to foster innovative research by small businesses, and instead used it for their own personal use,” U.S. Attorney William Hochul Jr said in a statement. “This fraud scheme had the effect of depriving deserving businesses of the opportunity for research funds, while simultaneously hurting the very Western New York communities where the research and work were most needed.”
The three allegedly “engaged in a scheme to defraud the federal gov9ernment of approximately $9 million in research contract/grant funds distributed by” the departments of Transportation, Energy and Agriculture, as well as the National Science Foundation (NSF).
The grants were intended to develop asphalt composition technologies, but were instead deposited into bank accounts controlled by the defendants “to then be distributed for the defendants’ personal use,” the statement said.
“Allegations include that they fabricated letters of support and investment by sham investment companies and non-existent individuals; provided false information in research proposals and in reports regarding business entities, employees, facilities, etc.; and provided false reports and emails regarding how the federal research funds were expended,” the statement said.
Harry Wen, as a Washington State University assistant professor, submitted a proposal that listed a company run by Ben and Zhang as a subcontractor. Harry claimed he did not have financial interest in the company, but the federal investigation found two of his own businesses had investment and technology ownership interests.
NSF grants awarded to phony proposals have skyrocketed in recent years, yet the agency refuses to release experiment budgets or data on how many funding requests are rejected for misconduct, The Daily Caller News Foundation previously reported.
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