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University to pay US$3.7 million to settle allegations of fraud

Rice University has agreed to pay US$3.7 million to the United States government to settle a lawsuit that accused its directors of violating rules on the use of funding from the National Science Foundation (NSF), the country’s leading research-funding agency. For 12 years, funds intended for graduate student scholarships were allocated to teaching activities that had nothing to do with research projects approved by the NSF, which is prohibited by federal law. According to a complaint filed by the US Department of Justice, “From November 18, 2006, through September 30, 2018, Rice knowingly engaged in a pattern and practice of improperly using NSF awards.” Founded in Houston, Texas, in 1912, the institution is a private, nonprofit university with more than 7,000 students. University spokesman Doug Muller told the Houston Chronicle that Rice’s administrators strongly believe they complied with the rules and do not admit any liability or violation of the law. “However, the university has agreed to pay a settlement in order to avoid the delay, uncertainty, inconvenience, and expense of protracted litigation with the federal government,” he said. The compensation is double the amount the university improperly used. In March, 215 research projects at Rice were funded by the NSF.