A federal grand jury has indicted two executives from a Silicon Valley company for allegedly defrauding both NASA and the National Science Foundation of nearly $1.3 million in research monies, federal prosecutors announced Friday.
Ali Kashani, of San Jose, and Yang Zhao, of El Cerrito, were charged with wire fraud and conspiracy to commit wire fraud, United States Attorney Melinda Haag announced. Kashani was also indicted for money laundering.
According to the indictment, Mr. Kashani, 52, and Ms. Zhao, 40, through their scientific research company, Atlas Scientific, are alleged to have defrauded the National Science Foundation (NSF) and the National Aeronautics and Space Administration (NASA) by creating the false impression that they had not applied for overlapping Small Business Innovation Research (SBIR) grants with both NSF and NASA. < p /> The SBIR program requires that grantees disclose similar or “essentially equivalent” research proposals the grantee has submitted to other federal agencies.
Atlas Scientific, a San Jose-based research company, performed research into adhesive tape based on carbon nanotubes.
Kashani, the owner and founder of Atlas Scientific, and Zhao, Atlas’s principal investigator, applied for and received multiple research grants from NSF and NASA totaling $1,299,881.
Federal prosecutors claim that during each application process, Kashani and Zhao allegedly denied having submitted overlapping project proposals to both NSF and NASA.
Kashani and Zhao also allegedly denied having received funding from NSF and NASA, when they requested additional grant monies, prosecutors said.
Zhao is additionally alleged to have misrepresented her employment status with the University of California Berkeley, when she applied for these grants.
Federal agents arrested Kashani on Thursday in San Jose. Zhao has fled to the People’s Republic of China.
The maximum penalty for each count of Conspiracy to Commit Wire Fraud in violation of Title 18, United States Code, Section 1349, and for the substantive Wire Fraud counts, is 20 years imprisonment and a fine of $250,000 fine.
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