Former UK professor allegedly misused $400,000, required students to work privately for free

Dongping "Daniel" Tao
Dongping "Daniel" Tao

A former University of Kentucky professor faked invoices, made graduate students work for his private consulting business for free while he pocketed more than $1 million, and ultimately misused more than $400,000, UK officials alleged Wednesday.

The allegations against Dongping "Daniel" Tao have been turned over to local, state and federal authorities for possible criminal charges.

The university completed two investigations of Tao, a mining engineering professor who was hired at UK in 1996. The investigations began last fall, after a graduate student complained that work for Tao's private clients went uncompensated. The investigations then turned up apparent financial improprieties.

Tao resigned in December after being confronted with the allegations.

"The university is deeply disappointed by the serious misconduct that has taken place, and we have undertaken a serious response," UK spokesman Jay Blanton said. "Much has been done already in terms of strengthening policies, processes and procedures. But more needs to be done, and we are steadfastly committed at all levels of the university to doing so."

The university's audits of Tao, which contain only summary information and do not mention the number of graduate students Tao worked with or the names of companies for which he consulted, make several allegations:

Attorney Christopher Van Bever said Wednesday morning that he had represented Tao in the past but had not been retained in this matter and could not comment on the university's charges. Efforts to reach Tao were not successful.

According to UK records, Tao received an undergraduate degree from Beijing University of Science and Technology and a master's degree in minerals processing engineering from China University of Mining and Technology in Xuzhou. In 1994, he received a doctorate in mining engineering from Virginia Tech, with a dissertation on the floatability of pyrite in coal flotation.

In 1996, Tao responded to an advertisement for a research associate to work at UK's Center for Applied Energy Research, and two years later, he was made an assistant professor in the mining engineering department.

By 2008, Tao had started to work more heavily with outside energy companies, which UK officials did not identify. Under UK rules, faculty must get permission before working for private companies, and they must not devote more than 20 percent of their time to those endeavors.

"I think the audit findings make clear that his consulting was well in excess of the university's rules," university counsel William Thro said.

The audits found that since 2010, Tao had received four new research grants worth $517,000. During that same time, he was paid more than $1.26 million for consulting with private companies, according to discussions auditors had with the companies.

In September 2013, a graduate student informed an adviser of being used by Tao for work for his private clients without compensation. The university opened an internal investigation, which was supported by BKD Consulting, a certified public accounting firm. In June 2013, UK's internal audit division began a regular audit of the College of Engineering, which also turned up problems with Tao.

Tao's work at UK focused on evaluating chemicals that are used to assist in the recovery of valuable minerals from a host of less-valuable minerals. The audit notes, for example, that one graduate student performed 86 hours of work in two weeks as the student dry cleaned pulverized fine coal. The students were required to fill out time sheets, which Tao allegedly used as documentation to support his consulting invoices.

The 2013 complaint wasn't the first that had been made against Tao.

The chairman of UK's Department of Mining Engineering, Rick Honaker, cautioned Tao about his work with graduate students and his consulting activities in May 2011 and May 2012.

In May 2011, Honaker criticized Tao for leaving on a summer program for China without telling him and for using a UK credit card to buy his airplane ticket for that trip.

In May 2012, Honaker sent a lengthy email to Tao detailing complaints made by graduate students about weekly time sheets Tao made them fill out. Much of that work was done for Tao's business, the audit found.

"In fact, if the issues stated in this email are not resolved or you retaliate against any of the current students in the program, the Graduate School will reassign all of your current graduate students to another advisor," Honaker wrote. "I hope that you understand the above issues must be remedied as soon as possible. You must stop immediately the requirement for time report submissions from students who are on scholarship or fellowship or on no funding at all. You must also ensure that graduate students involved on consulting projects are either compensated for their effort or voluntarily committed to the experimental work on the basis of educational value.

"If the issues are not resolved, your Graduate Faculty status may be revoked and thus you will no longer be able to serve as a graduate advisor."

Tao replied in a lengthy email, denying the accusations. Honaker responded: "The perception that is created as expressed by UK Legal Counsel and others is that the hours being reported could be used by you as billing hours for consulting projects. Therefore, you need to not put yourself in a situation that leads others to believe this to be true."

Those emails were not formal reprimands and were not included in Tao's personnel file, which the Herald-Leader obtained under the Kentucky Open Records Act.

Eric Monday, UK's executive vice president for administration, said the university continued to examine how it could change procedures to avoid future problems, including better faculty evaluations and increased disclosure of outside work. Faculty and staff also will be required to attend more training on such issues, he said.

"There's no silver bullet to prevent that solitary individual from perpetuating fraud," Blanton said. "When it does happen, we want people to feel freer and to report it more readily."

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