Mayo Foundation, Rochester, Minn., settled charges of research-grant fraud with the Justice Department, agreeing to pay $6.5 million. The foundation, the parent of Mayo Clinic, denied the allegations and settled without admitting wrongdoing. According to the complaint, based on a whistle-blower suit, the clinic illegally transferred expenses between federal grants and failed to monitor and manage charges to federal grant programs. The government contended that as a result it ended up paying more. The whistle-blower, a former Mayo accountant, will receive $1.3 million of the settlement.
Mayo said it cooperated with the inquiry, which began in 2003 and involved grants dating to 1992. "No money is missing and no false claims, for any payments, were submitted to the government," the clinic's president and chief executive officer, Denis Cortese, said in a statement. "The inquiry reflected a difference of opinion over bookkeeping procedures." Mayo's Rochester facilities received $130 million in research funding from the National Institutes of Health in 2003, double the dollar amount in 1999, a Mayo spokesman said. Federal enforcement agencies have been pursuing research-grant fraud for several years and have obtained settlements from several prestigious academic medical centers. -- by Mark Taylor