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Federal Appeals Court Upholds Fraud Verdict Against Cornell University Medical School For Misuse Of NIH Aids Funding
Date:9/6/2012

t of Appeals unanimously rejected all of Defendants' arguments.

As to damages, Cornell had argued that, since the fellows had received some training, it should have been entitled to argue that the Government received some "benefit of the bargain," and that the jury should have been allowed to reduce the damages by whatever value it believed the government had received. In a case of first impression in the 2nd Circuit, the Court held that, when the government does not pay for a tangible good, the Court had properly concluded that the measure of damages is the full amount of money that flowed from the government to the recipient.

As to materiality, the Court of Appeals rejected Defendants' contention that Feldman should have been required to present testimony from the NIH program officer who reviewed the progress reports, or another NIH official, that NIH would have cut off the funding. The Court noted that the jury had more than enough evidence, based on NIH's own rules and regulations presented at trial, that the defendants' misrepresentations about such items as the number of faculty involved in the program, the failure to teach the proposed curriculum, and an almost complete lack of access to HIV-patients, would naturally have been capable of influencing NIH's funding decisions.

Finally, the Court of Appeals held that Judge Pauley had not abused his discretion in excluding evidence of trial that neither the NIH nor the government had not acted in response to Dr. Feldman's earlier complaints about the fellowship.

THE LONG ROAD TO JUSTICE

The road to this particular verdict and affirmance has been long, especially considering that Dr. Feldman first raised these concerns to Cornell in 1999.  After notifying the head of Psychiatry and the NIH, the NIH requested Cornell to complete an internal investigation into the fraud, which they took over two years to complete.  Basing their findings on interviews w
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SOURCE Salmanson Goldshaw, P.C.
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