Feds: KY researcher filed fake documents to get payments from $1 million in grants
A Lexington businessman submitted false reports to justify payments from research grants totaling more than $1 million, a federal grand jury has charged.
The grand jury indicted Subhadarshi Nayak on Thursday on a total of 15 charges of conspiracy, wire fraud, money laundering and making false claims.
The charges involve grants from the U.S. Department of Energy (DOE) and the Environmental Protection Agency (EPA) under programs that help small businesses get money to research and develop technology projects.
One $100,000 grant involved a proposal Nayak submitted to EPA in 2017 for research on an idea to clean up contaminated soil.
Nayak said in the proposal that his company, Qmetry Corporation, had a contract with the University of Kentucky for a professor, who was not identified in the indictment, to do some of the work on the project, the indictment said.
Nayak knew that collaborating with a university increased the chance of winning funding, the indictment said.
However, UK had no record of a contract with Nayak or his company, and the professor he listed in the proposal hadn’t agreed to work on the project, the indictment said.
Nayak had discussed his idea with the UK professor in general terms, but didn’t provide her with specifics and didn’t give her a copy of the proposal he submitted, according to the indictment.
Nayak made up a fake subcontract assigning work to the professor and submitted progress reports with details of work by him and the professor that were false, in order to get payments, the indictment charged.
After the first phase of the project, Nayak submitted a proposal for a second phase seeking $400,000. The indictment did not say he received that funding.
The other charges relate to grants that Nayak and a partner received from the Department of Energy in 2013.
Nayak and the other person, identified only by the initials J.A, operating through a company called ScienceTomorrow LLC, received an initial grant of $153,696 and later got a second award of $999,266, the indictment said.
Nayak and J.A. had a contract to pay an unidentified university $45,000 for some work on the project, but didn’t make the payment.
Instead, Nayak and J.A. allegedly “repurposed” the $45,000 without notifying the federal agency.
The two later made up a fake letter saying that ScienceTomorrow had an agreement with the university to work on a scanning electron microscope project.
Nayak and J.A. knew the university didn’t do any work on the project, the indictment said.
If Nayak is convicted, the government wants to seize more than $150,000 it found in accounts related to his businesses.
The most serious charge in the indictment has a top sentence of 20 years in prison.
