Davis man agrees to pay $635,000 to US government over false statement claims

A Davis man agreed to pay $635,000 to the United States after he allegedly submitted false statements to the National Institute of Environmental Health Sciences to secure grant funds, according to Acting U.S. Attorney for the Eastern District of California — which includes Yolo County — Phillip A. Talbert.

Owen Hughes applied for and received a Small Business Innovation Research grant to conduct environmental research in 2007 after certifying that he had implemented financial safeguards to ensure the proper use of grant funds, according to court documents.

The settlement resolves allegations that despite his certifications, Hughes had no financial policies in place, and could not provide evidence as to how he actually used the federal funds.

“This settlement sends a clear message that recipients of federally funded grants must strictly adhere to the regulations applicable to those grants and fully account for their use of federal funds,” Talbert stated. “Recipients who fail to do so risk significant consequences.”

Hughes was also alleged to have mixed grant funds into his personal account, and used it to pay aircraft hangar rental fees and buy aircraft parts, according to a statement from Talbert’s office.

“Establishing required financial policies is a key component to proper accounting of SBIR grants. Therefore, it is imperative that individuals and entities implement sound policies to avoid mismanagement of these limited funds,” stated Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services, Steven J. Ryan. “Working with our auditors and law enforcement partners, we will continue preserving the integrity of all our grant programs.”

The National Institute of Environmental Health Sciences is a component of the National Institutes of Health, which is itself a component of U.S. Department of Health and Human Services.

This case was the result of an investigation by the HHS Office of the Inspector General. Assistant U.S. Attorneys Colleen Kennedy, Rachel Muoio and Steven Tennyson handled the matter for the United States.

The claims settled by this agreement are allegations only, and there has been no determination of liability, according to the statement.