eBibelot Settles Lawsuit for $630,000 Over NSF Grant Violations
The technology startup eBibelot, headquartered in Saratoga, alongside CEO Melody Fallah-Khair, has consented to a $630,000 settlement to resolve a federal lawsuit alleging violations of the False Claims Act.
This suit contended that they improperly certified compliance with specific stipulations of a National Science Foundation (NSF) grant, which mandated restrictions on full-time external employment.
Announced by the U.S. Attorney’s Office for the Northern District of California, the settlement pertains to eBibelot’s 2019 application for a Phase II Small Business Innovation Research grant from the NSF.
Federal prosecutors assert that Fallah-Khair, in her application, confirmed that she would act as the principal investigator and retain her primary employment with eBibelot.
The NSF grant’s conditions stipulated that principal investigators must commit their primary employment to the small business throughout the grant period. Generally, this condition prohibits any external employment exceeding 19.6 hours per week.
The allegations suggest that, in contradiction to this certification, Fallah-Khair commenced full-time employment with a multinational telecommunications firm shortly after the grant application submission. She allegedly dedicated at least 40 hours per week to this outside role from May 2019 to April 2021.
The federal government indicated that eBibelot omitted the full-time external employment of its principal investigator in numerous post-award certifications. In one instance, despite being explicitly asked to disclose any additional employment, Fallah-Khair reported none.
According to the terms of the settlement, both eBibelot and Fallah-Khair will disburse $630,000.
“Research funded by taxpayer dollars must uphold the utmost integrity. When federal fund recipients breach grant terms, they misallocate critical research funds away from deserving small enterprises,” stated U.S. Attorney Craig H. Missakian.
“The SBIR program is crucial in nurturing innovation within small businesses; thus, its protection against exploitation is imperative. I extend gratitude to the U.S. Attorney’s Office for their steadfast commitment to maintaining its integrity,” remarked Megan E. Wallace, Acting Inspector General for the National Science Foundation.
It is important to note that the allegations addressed by the settlement are unproven, with no determination of liability as affirmed by prosecutors.
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