Former Penn State professor pleads guilty in $3M grant fraud

HARRISBURG, Pa. -- A former Penn State professor has pleaded guilty to the charge of committing a $3 million federal research grant fraud.

Craig Grimes, 55, of Raleigh, N.C., pleaded guilty Feb. 21 in federal court. The plea was announced the same day by the U.S. Attorney for the Middle District of Pennsylvania.

Grimes was charged with wire fraud, false statements, and money laundering. He was a Professor of Material Science and Engineering at Penn State.

According to the communiqué, between June 30, 2006, and Feb. 1, 2011, Grimes defrauded the National Institutes of Health. The NIH provides funding for medical research through grants.

Grimes was the sole proprietor of a company called SentechBiomed, in State College, Pa. He requested a $1,196,359.00 grant from NIH He said he would direct approximately $509,274.00 to the Hershey Medical Center to conduct clinical research but the money was never paid. The studies were not performed. Instead, he used the money for his own purposes.

Grimes was also indicated for making false statements to the United States Department of Energy about another grant. While a Penn State professor, in August 2009, Grimes applied for a grant of  $1,908,732.00 grant from the Advanced Research Projects Agency - Energy which was created to foster research and development of energy-related technologies. The ARPA-E grant was funded by the American Recovery and Reinvestment Act.

ARPA-E requires applicants to disclose other funding sources to avoid duplication. Grimes allegedly stated there was no other funding. However, he had received a grant from the National Science Foundation.

Grimes could receive to 20 years in prison and a fine of $250,000. A sentencing date has not yet been scheduled.

According to U.S. Attorney Peter J. Smith, “The investigation of irregularities in the administration of federal university research grant programs is on-going. Anyone with information concerning suspected research fraud should contact the Office of Inspector General for the appropriate federal agency or the U.S. Attorney's Office.”