eBibelot, a technology startup based in Saratoga, California, and its CEO, Melody Fallah-Khair, have agreed to pay $630,000 to settle allegations that they violated the False Claims Act by misrepresenting compliance with terms of a National Science Foundation (NSF) grant. The case centers on eBibelot’s 2019 application for a Phase II Small Business Innovation Research (SBIR) grant.
According to federal authorities, Fallah-Khair certified in the grant application that she would act as the project’s principal investigator and devote her primary employment to eBibelot as required by NSF rules. These terms typically prohibit other employment exceeding 19.6 hours per week during the award period.
However, officials allege that after submitting the application, Fallah-Khair began full-time work at a multi-national telecommunications company and worked at least 40 hours per week there from May 2019 through April 2021. It is further alleged that eBibelot did not disclose this outside employment in several post-award certifications submitted to NSF. In one instance, Fallah-Khair was required to report any additional employment but reported none.
Under the settlement agreement reached with federal prosecutors and NSF’s Office of Inspector General (OIG), eBibelot and Fallah-Khair will pay $630,000.
“Taxpayer-funded research must be conducted with the highest integrity. When recipients of federal funds fail to comply with the terms of the grant, they divert valuable research dollars from deserving small businesses. My Office will continue to use the False Claims Act to protect federal grant programs from fraud and abuse,” said United States Attorney Craig H. Missakian.
“The SBIR program is vital to fostering innovation in small businesses, and protecting it from abuse is essential. I appreciate the U.S. Attorney’s Office for its strong commitment to safeguarding its integrity,” said Megan E. Wallace, NSF’s Acting Inspector General.
The matter was handled for the government by Assistant U.S. Attorney Benjamin J. Wolinsky with support from Alan Lopez, Jonathan Birch, and Garland He. The investigation was a coordinated effort between the U.S. Attorney’s Office for the Northern District of California and NSF-OIG.
Officials emphasized that these are only allegations; there has been no determination of liability.
