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Biotech Firm Manager Accused Of Fraud in Use of Grant Money

The business manager for Syntrix Biosystems (Auburn, WA) was charged with defrauding the National Institutes of Health and the National Cancer Institute out of federal grant money that was supposed to be used for drug and cancer research.

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The business manager for Syntrix Biosystems (Auburn, WA) was charged with defrauding the National Institutes of Health and the National Cancer Institute out of federal grant money that was supposed to be used for drug and cancer research.

Chsitopher K. Ma, the director of business affairs for Syntrix Biosystems, was arrested last Thursday by criminal investigators from the U.S. Department of Health and Human Services. He appeared before U.S. Magistrate Judge Mary Alice Theiler, where he pleaded not guilty and was ordered detained pending a preliminary hearing or a grand-jury indictment.
 
Ma is charged with wire and mail fraud for allegedly trying to foist a fake audit off on the National Institutes of Health (NIH) in 2006 after officials there became suspicious of expenditures by the company during the previous year. He's also accused of forging project ledgers for two Syntrix programs receiving NIH grants.
 
Syntrix received nearly $5.6 million from the NIH for nine contracts between August 2001 and June 2008. According to its Web site, Syntrix is a privately held Washington company involved in pharmaceutical, biomedical and biotechnical research.
 
The complaint alleges that Ma used some fraction of that money to partially fund a real-estate purchase, make car payments and purchase other items, including Internet dating services, clothing, sports tickets and food and alcohol — including a $1,800 tab one night at the Blu-Water Bistro on Lake Union. The government alleges all of those expenditures were in violation of NIH grant-usage policies.
 
The Web site says Ma is a former financial adviser for the investment firm Morgan Stanley and worked as the director of business development with the Department of Laboratory Medicine at the University of Washington School of Medicine.
 
Another company official also is named in the complaint as participating in some allegedly improper spending activities, but he has not been charged.
 
Assistant U.S. Attorney Susan Loitz said no decision has been made on whether the other official will be charged. She said investigators are still attempting to compute exactly how much grant money was allegedly improperly spent. She said one real-estate transaction — Ma's purchase of a commercial building in Auburn in 2004 — apparently involved $100,000 in NIH grant money.
 
Ma is accused of trying to cover up the improper expenditures by forging audit documents, attributing them to a nonexistent accounting firm and faxing them to NIH auditors. Ma also allegedly forged ledgers for two NIH projects, allegedly in hopes of satisfying NIH accountants.
 
Source: The Seattle Times Company