Prof admits to defrauding taxpayers out of $1.3 million
Purdue University professor Qingyou Han secured funds from the National Science Foundation by submitting grant proposals for a company in his wife's name that he secretly operated. He used the proposals to launder money back into his possession.
Taxpayer funds were used to "hire" employees that turned out to be Han's minor children, and for "rent" payments on the "lab," which was actually a house that Han had already purchased in full, also with grant money.
Purdue University mechanical engineering technology professor and director of Purdue's Center for Materials Processing Research Qingyou Han pleaded guilty to a felony wire fraud scheme involving the laundering of $1.3 million in federal grant money for the purpose of buying a house and funding other personal expenses.
Along with his wife, Lu Shao, Han admitted to several instances of using a private company owned by Shao called Hans Tech as a front to funnel National Science Foundation (NSF) grant money back into the family for personal expenses. The private company, Hans Tech, was created solely as a front to perpetuate an elaborate scheme in which Han used his wife's name to write and submit grants proposals to the NSF, according to the Department of Justice. Some of these proposals involved the hiring of Han as a research subcontractor.
The NSF also paid two Hans Tech employees for research purposes. These employees turned out to be the couple's minor children.
The $3,000 monthly rent for the research laboratory required for Hans Tech's research was actually the couple's new home, which the DOJ says had already been purchased in full and owned by Hans Tech. These "rent" payments totaled over $150,000.
When the couple wanted to pay off the mortgage on their house, Hans used a separate company to pose as a third party seeking to invest in Hans Tech. Hans then used Hans Tech's own money to make this "third party" investment back into Hans Tech, allowing him to cycle $80,000 in grant money back into his own personal bank account. Almost all of these funds were used to pay off the mortgage.
“The National Science Foundation small business grants are funded by taxpayer dollars and are meant to be used as seed money to help fuel innovation and advancement in science and technology. Schemes such as this, carried out by an otherwise well-respected member of the scientific community, are an affront to NSF and the hard-working employees who administer its grants, and they also deprive other more deserving small businesses from bringing their innovations and advancements to the U.S. marketplace, " U.S. Attorney Thomas Kirsch said, adding that “this kind of taxpayer-funded program fraud will be aggressively prosecuted by my office going forward, just as it was in this case.”
Purdue University spokesman Jim Bush said in a statement to Campus Reform that the school is "aware of the plea agreement that was entered in the federal court at Hammond and understand that sentencing will be carried out early next year. We have not yet reviewed the agreement or discussed the matter with the professor. Once all information is available to us, the university will carefully consider the matter in light of its policies and make decisions in a manner consistent with those policies and the professor’s right to due process under university procedures."
Campus Reform reached out to Han for comment but did not hear back in time for publication.
The first of Hans' sentencing hearings are scheduled for Jan. 21, 2020.
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