Raleigh Professor and Company Agree to $152,000 Settlement over Federal Fraud Allegations

North Carolina Researcher and Company Settle Federal Grant Fraud Allegations for $152,500

A Raleigh professor and his biotechnology company have reached a settlement with federal authorities over allegations of submitting false claims under National Science Foundation (NSF) grants and Paycheck Protection Program (PPP) loans, officials announced Monday.

Dr. Michael Harrington and Genoverde Bioscience, Inc. agreed to pay $152,500 to resolve allegations of financial impropriety related to government funding, according to the U.S. Department of Justice. The settlement addresses claims that the company submitted duplicative expense claims under federal grants and improperly obtained PPP loans and loan forgiveness during the COVID-19 pandemic.

“This civil fraud settlement demonstrates our commitment to protect taxpayer money and guard the integrity of our grant programs,” said U.S. Attorney Ellis Boyle in a statement. “Our office will zealously pursue damages and civil penalties against grant recipients whether the amounts taken are large or small.”

The grants in question were part of the NSF’s Small Business Innovation Research (SBIR) program and involved research on harvesting industrial hemp and trees, according to Justice Department officials. The SBIR program is highly competitive and specifically targets American-owned small businesses conducting research that could lead to commercial innovation.

Harrington, who is listed as a professor at Shaw University on the institution’s website, began teaching there in 2023 according to his LinkedIn profile. Neither Shaw University nor Genoverde Bioscience immediately responded to requests for comment on the settlement.

The federal investigation highlights ongoing concerns about oversight of pandemic relief programs and scientific research grants. The PPP, established during the early months of the COVID-19 pandemic, provided nearly $800 billion in potentially forgivable loans to small businesses but has faced scrutiny over fraud and misuse of funds.

Megan E. Wallace, NSF’s Acting Inspector General, emphasized the importance of maintaining program integrity, stating, “The NSF Office of Inspector General is committed to ensuring the integrity of NSF’s SBIR grant program by holding accountable those who choose to engage in false claims and misrepresentation schemes.”

Federal authorities noted that the False Claims Act allows the government to recover triple the amount of money falsely obtained, plus additional penalties for each false claim submitted. This powerful statute has been a critical tool for federal prosecutors combating fraud against government programs.

The biotechnology sector, particularly companies focused on industrial hemp and sustainable agriculture, has seen significant growth in federal research funding in recent years. With increased investment has come heightened scrutiny of how these research dollars are allocated and spent.

This settlement resolves the civil claims against Harrington and Genoverde Bioscience without a judicial determination of liability. According to the Justice Department, the agreement includes no admission of liability from either the researcher or his company.

Federal agencies have intensified efforts to recover improperly obtained funds from pandemic relief programs since 2021. The Small Business Administration, which administered the PPP program, has worked closely with the Justice Department to identify and pursue potentially fraudulent applications.

The case underscores the government’s ongoing commitment to protecting scientific research funding integrity while recovering taxpayer funds obtained through alleged misrepresentation.