eBibelot, a Saratoga-based startup, and CEO Melody Fallah-Khair agreed to pay $630,000 to resolve allegations of False Claims Act violations tied to a 2019 NSF Phase II SBIR grant application. Fallah-Khair certified she would serve as the project principal investigator and maintain primary employment with eBibelot. NSF grant terms required PIs to devote primary employment to the small business and generally precluded outside work exceeding 19.6 hours per week. Prosecutors allege Fallah-Khair began full-time work at a multinational telecommunications company and reported no outside employment in multiple post-award certifications from May 2019 through April 2021.
Technology startup eBibelot, based in Saratoga, and its CEO, Melody Fallah-Khair, have agreed to pay $630,000 to settle a federal lawsuit that claimed they violated the False Claims Act by improperly certifying compliance with the terms of a National Science Foundation grant that restricted full-time outside employment. The settlement announced by the U.S. Attorney's Office for the Northern District of California concerns eBibelot's 2019 application for a Phase II Small Business Innovation Research grant from the National Science Foundation.
The terms of the NSF grant required that principal investigators devote their primary employment to the small business at the time of the award and throughout the award period, a requirement that generally precludes other employment exceeding 19.6 hours per week. The settlement resolves allegations that, contrary to this certification, Fallah-Khair began working full-time for a multi-national telecommunications company shortly after submitting the grant application and devoted at least 40 hours per week to this outside employment from May 2019 through April 2021.
"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,," said U.S. Attorney Craig H. Missakian.
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