April 27, 2011

University Files Appeal After WCMC Researcher Found to Have Defrauded Federal Government

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A new round of litigation about whether a Cornell researcher defrauded the federal government kicked off last month, when Cornell submitted its appeals brief to the United States Second Circuit Court of Appeals for the Southern District of New York.

The appeal challenges a previous ruling from July 2010, which affirmed three of five accusations that Weill Cornell Medical College researcher Dr. Wilfred van Gorp made false claims to the government to secure continued federal funding for HIV/AIDS research through a National Institute of Health grant.

After a jury ruled that van Gorp had violated the False Claims Act on three separate occasions, Federal District Judge William Pauley III ordered WCMC to pay $887,714 in damages. Furthermore, on Feb. 9, Pauley instructed Cornell to pay former Cornell fellow Dr. Daniel Feldman, who filed the accusations against van Gorp, an additional $631,882 in attorneys’ fees, costs and expenses.

The recent appeal, filed March 10, contests both verdicts. Michael Salmanson, the legal counsel for Feldman, who originally filed suit against van Gorp in 2003, said he is expected to submit a response in early July.

“We believed that there were some serious mistakes made during the course of the trial and we continue to believe that this was an excellent training program that did exactly what it was supposed to do, which was train people for research in neuropsychology and AIDS,” said James Kahn, deputy counsel for WCMC. “Most of the people who were in that program worked in that area, either currently or at least from some period of time after they finished it.”

Despite Feldman’s accusations, some of the fellows working at WCMC under the NIH grant, which was intended to train doctors for careers in HIV/AIDS research, “testified in strong support of the program and Dr. van Gorp,” Kahn added.

After working for van Gorp as a fellow from 1998 to 1999, Feldman levied a series of accusations against the medical college in court — allegations Feldman’s attorney Salmanson said the jury ruling affirmed.

According to Feldman, the grant outlined formal classes that were never taught and the fellows spent a disproportionate amount of time seeing clinical patients instead of researching, as van Gorp had indicated in reports submitted to the NIH. Feldman said that the majority of these patients did not have HIV/AIDS.

Feldman further accused van Gorp of having the fellows evaluate significantly more “medicolegal” cases — patients involved in legal trials related to their conditions, such as those with disabilities or criminal defendants claiming mental impairment — instead of those with HIV/AIDS.

The jury ruled that van Gorp made fraudulent claims in three documents, although Feldman contended that two additional documents — the original grant application and first progress report — were also misleading. Salmanson said that the jury did not side with Feldman on these two claims because they involved documents filed prior to program implementation, which would have therefore required proof of van Gorp’s intent.

“[Van Gorp] affirmatively said in those progress reports that they had implemented the program as it had originally been designed, and in fact that had not happened,” Salmanson said.

Salmanson added that Feldman’s accusations were supported by the jury’s ruling.

“[The federal jury] decided that once the training program was underway, the defendants falsely described the fellows’ actual activities under the grant in a way that was capable of influencing the government to continue the funding,” Salmanson said. “[The jury ruling is] a bit of a black eye on Weill Cornell.”

Still, in the most recent brief filed in March, WCMC argues that the federal jury erred on several fronts in its decision.

WCMC’s central argument is that the verdict was wrongly adjudicated on the basis of van Gorp’s methods of implementation, rather than on the basis of the “material” consequences — or the ultimate success — of van Gorp’s research.

“The District Court erred when it held as a matter of law that liability on any false claim automatically would result in damages equal to the amount paid for that grant year,” the brief states. “The proper measure of damages … is the difference between the value of the work promised and the value received.”

Additionally, WCMC argues that the court “excluded key evidence showing that the false statements at issue here were not material.” Because the court excluded evidence regarding the rationale behind some of the provisions in the NIH grant, according to WCMC, the jury was wrongly left to assume that mistakes in van Gorp’s formal application amounted to a functional difference in the NIH’s intent for the program.

“The District Court allowed the jury improperly to guess what statements in [van Gorp’s application to the NIH] could influence the funding decision and simply assume that a statement was material merely because NIH asked for the information,” the brief states.

If the court upholds its initial ruling, Feldman will be entitled to a relator’s award for his role in exposing van Gorp’s fraudulent activity, according to Salmanson.

“He would be entitled to 30 percent of the underlying award at the end of the day, though he hasn’t received anything yet,” Salmanson said.

Salmanson said the trial did not delve into whether or not WCMC “knew or should have known” how van Gorp was conducting the fellowship, because, under the False Claims Act, “the institution is automatically liable” for the misconduct of its employees.

Kahn, however, said that Cornell was unaware of any issues “until Dr. Feldman brought them to the attention of Weill Cornell after the program ended.”

Van Gorp left Cornell in 2001 before the grant program ended to work at Columbia University. Kahn said that his departure, which was prior to when Feldman filed suit in 2003, was not connected to the case.

Salmanson predicted that a decision on the appeal will not be reached until the fall at the earliest.

Original Author: Rebecca Harris