Agiltron: Charging the Grant, Changing the Timesheet

Agiltron and its president agreed to pay $2.25 million to resolve allegations of falsified labor charges on SBIR and STTR projects. The government alleged that employees charged hours that did not match their actual work, changed completed timesheets to maximize charges, and discarded the instructions telling them what to change. For someone who saw the original hours and the revised charges, this SBIR and STTR grant fraud case reaches into a familiar part of the business: who decides which award pays for a person’s time.

Agiltron was a research and development company in Woburn, financed largely by federal funding. The Department of Justice announced the civil settlement on August 12, 2016.

How Agiltron’s Labor Charges Departed From the Work

The government alleged that Agiltron and its president directed and allowed employees to charge labor hours to awards even when the hours did not correspond to their actual time and effort. From 2009 through 2012, the company received funding under fifteen SBIR and STTR grants and contracts. Small Business Innovation Research and Small Business Technology Transfer funding was intended to help small businesses develop products they could ultimately commercialize. False charges cheat the honest small businesses competing for those awards and the taxpayers funding them.

That purpose makes the alleged incentive plain. Federal funding was supposed to support product development. According to the government’s account, the goal of the timesheet changes was to maximize charges to each grant or contract. We see the absurdity in treating a research award as a target to bill up to, then rewriting the work record to get there. Backwards. The charge was supposed to follow the work.

The allegations reached beyond the hours employees entered initially. The Justice Department said the company and its president also directed and allowed employees to alter timesheets they had already completed.

The final allegation concerned the instructions behind those changes. The government said employees were directed and allowed to discard or destroy documents telling them how many hours to charge or change. Those documents would explain more than the final total. They would connect a changed entry to the direction that produced it.

Why a Completed Timesheet Matters

Agiltron received both grants and contracts, and the alleged mismatch concerned the labor charged to them. For an insider, the useful comparison is concrete: the work performed, the hours first recorded and the charge the company ultimately assigned to an award.

A 2019 study in the Journal of Forensic and Investigative Accounting, Unique Characteristics of Management Override Fraud Cases, compared occupational fraud cases involving managers overriding controls with cases involving a lack of controls. The study found that stronger anti-fraud environments were associated with management override rather than missing controls. Its explanation gets to the problem:

That is why we look beyond whether a timekeeping system existed to who could change its records. In Agiltron’s case, the government alleged that the company and its president directed or allowed those changes.

The Investigation Reached Across Federal Agencies

The investigation began when inspector general offices at participating agencies learned of allegations of improper time-and-effort billing. The agencies included the National Science Foundation, the Department of Homeland Security, the Department of Energy, NASA and the Department of Defense.

In 2013, the Department of the Air Force suspended Agiltron and its president from government contracting, in part because of suspected improper billing. Agiltron later reached an administrative agreement with the Air Force to end the suspension. In doing so, it implemented measures to correct its accounting practices and internal controls.

The later civil settlement resolved multiple federal agencies’ claims for damages over alleged fraudulent time-and-effort billing.

Other Grant Cases Put the Work Beside the Charge

The Scripps Research Institute case shows how labor can be charged to a funded project while the employee works on something else. In its grant-mischarging settlement announcement, the Justice Department described allegations that faculty time spent on new grant applications, teaching, committee work and administration was charged directly to existing National Institutes of Health projects without adequate effort accounting.

The whistleblower, a former employee, put the mismatch in personal terms in the complaint:

The allegation describes real work charged to the wrong funded activity. That comparison matters to someone who knows the science and the daily assignments: knowing that an employee worked is only the beginning of understanding what a grant paid for. In Agiltron’s case, the government likewise focused on the relationship between actual time and effort and the award charged, with the added allegations of altered timesheets and discarded instructions.

The Scripps complaint also alleged that effort forms used internal account numbers without descriptions, leaving it unclear which grants or accounts the hours belonged to. According to the complaint, the forms did not distinguish time spent on awarded grants from time spent on new applications, teaching or other activities. The accounting code is another part of the story: it connects the hours someone enters to the funding source that bears the charge.

Sand 9 supplies a closer small-business funding parallel. In its National Science Foundation SBIR settlement, the government alleged false accounting and timekeeping representations. The government alleged that progress certifications released additional funds despite incomplete labor records and absent tracking of expenditures by award. The alleged disconnect reached the government’s decision to release money.

What Proof Do You Need as a Whistleblower?

For a case about altered SBIR or STTR labor charges, we examine the connection between the work performed, the award billed and the people directing the entries. Agiltron’s allegations make the significance of original billing and time records concrete: they can show how the company arrived at the number it asked the government to pay.

You may know the research assignment because you did the work. You may have seen an instruction to change a completed timesheet, or handled the accounting that assigned the cost to an award. Each view can explain a different part of the same transaction. Our job is to understand how your knowledge connects to the government’s payment and the decisions behind it.

The alleged destruction of instructions gives the human account particular value here. Someone who received a charging instruction may understand why an entry changed in a way that the final timesheet cannot explain. That is the kind of detail we work through with you, alongside the records you already know.

How Much Money Can a Whistleblower Get From a Qui Tam Lawsuit?

A whistleblower case under the False Claims Act can pay a whistleblower reward of 15% to 30% of what the government recovers.

In the Scripps grant-billing case, the Justice Department announced a $1.75 million whistleblower reward. A research employee’s knowledge of the work and its funding can be central to a case about false labor charges.

You Saw the Time Before It Changed

If you know why the hours on a research award differ from the work, talk with our whistleblower experts about the charges you saw. We build the case with you and bring in research grant fraud whistleblower lawyers who understand labor billing and funding records. You have a partner through the case, starting with that first account of what changed and who directed it.