Ansun Biopharma: The Timesheets Followed the Money

In the Ansun Biopharma NIH time charging settlement, the company agreed to pay $495,000 to the United States to resolve civil False Claims Act allegations that it billed the National Institutes of Health for falsely reported employee hours and labor categories. The company’s separate criminal settlement describes hours moved from non-government projects into federally funded work. If you handled project accounting or knew where employees actually spent their time, that is a change you could recognize from inside the business.

Ansun, formerly NexBio, was a biotechnology company headquartered in San Diego. The Justice Department announced the settlement on January 7, 2015. This pharmaceutical fraud case centered on the company’s invoices for research funding, with the Fludase contract and NIH grants carrying the disputed labor charges.

The Grants and the Fludase Contract

NIH funded influenza research at Ansun through grants and a contract to develop Fludase, an experimental antiviral drug for treating influenza. The company received NIH research grants and a contract during the period from 2004 through 2011.

The government’s description of the funded work names grants for “Broad-Spectrum Therapeutics for Influenza” and “Development of Fludase as an Anti-Influenza Agent.” In September 2006, the company also received a $50 million contract to develop the influenza drug.

According to Ansun’s criminal settlement, the company had government-funded projects and non-government projects, and the timekeeping system was supposed to distinguish them. The same settlement describes a different approach: charging hours to Fludase even when the employee’s actual project fell outside the contract’s scope.

Money authorized for developing Fludase came with a defined purpose. The transfers described in the criminal settlement made NIH the payer for work outside that purpose. The project name attached to an hour determined where the company sent the bill.

The Timekeeping Policy and Management’s Instructions

In its criminal settlement, Ansun admitted that it created a timekeeping policy in 2009 requiring employees to record their project hours accurately. The policy covered work on the Fludase contract and other NIH-funded grants. It also required accurate hours for overhead, general and administrative work, and other labor categories.

According to the same settlement, the former chief executive directed the then vice president of finance and administration to fabricate employee timesheets to maximize NIH billing. The finance executive was responsible for the accounting department. The direction came from the top and reached the people controlling the time records.

That settlement also described instructions to maximize reimbursement regardless of the actual hours employees spent on the funded projects. It specifically identified directions to bill Fludase for employees working outside the contract’s scope. The written policy asked employees to report the work accurately. Management’s instructions asked accounting to maximize the payment.

Hours, Categories and Projects on the Timesheets

The government’s account describes fabricated timesheets for some employees, changes to hours on existing timesheets, and transfers between labor categories. The criminal settlement also describes hours moved from non-government projects to Fludase or an NIH grant.

According to the criminal settlement, the purpose and effect were to obtain NIH money for work the grants or contract did not cover.

For someone who knew the employee’s assignment, the revealing detail could be the project charged. For someone in accounting, it could be the change between the employee’s time entry and the version used for billing. Each sees a different part of the same alleged diversion of labor costs.

Cash Flow Pressure Behind the Time Charges

In its criminal settlement, Ansun acknowledged that its former chief executive wanted the company to use Fludase funds whenever possible in case NIH terminated the contract before the allotted money had been used. The settlement also describes his instructions to keep NIH grant funding available for as long as possible to manage cash flow problems.

The instructions served both pressures: use the contract money while it remained available, and keep grant money available to support the business. On that account, the company’s need for cash was driving the charges entered against particular projects.

The written policy measured time spent on the work. The competing instruction concerned how much funding remained and how long the business could draw on it. The changes described in the criminal settlement made the timesheets serve that financial goal.

NIH Invoices and the Civil Settlement

The civil settlement addressed invoices that allegedly misstated both the number and category of employee hours. The Justice Department identified false claims submitted from September 1, 2006, through June 30, 2011, in connection with several NIH research grants and a contract.

For an insider, the connection runs from the employee’s work to the time entry, any change to that entry, and the invoice that used it. A direction to charge a different project becomes especially telling when the resulting invoice asks NIH to fund that work. On the criminal settlement’s account, taxpayers were made to cover work outside the research they had funded.

Research Funding Depends on What the Company Reports

NIH grant cases can also concern what a company reports about the science supporting its funding. Athira Pharma’s settlement announced January 6, 2025 resolved allegations that it failed to report research-misconduct allegations in NIH grant applications, progress reports and assurances to NIH and the Department of Health and Human Services’ Office of Research Integrity.

In Athira, the alleged omission concerned research misconduct in the company’s reports and assurances. In Ansun, the civil allegations concerned employee hours and labor categories on invoices. Both put the company’s account of its research work between the government and the money it paid.

What Evidence Is Needed to Prove Fraud?

For NIH time charging, the useful evidence connects actual work, reported hours, project scope and the invoice submitted to the government. Ansun’s criminal and civil settlements make those connections concrete: a written timekeeping policy, timesheets that changed, labor categories that shifted, and instructions about which funding to use.

We work with you to connect the accounting records to the instructions behind them and the charges NIH received.

Your knowledge as a pharmaceutical whistleblower may start with the work itself or with the accounting. We connect that view to the company’s funding and billing decisions. A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

You Know Where the Hours Belonged

If you saw employee time moved onto a government-funded project, talk with our whistleblower experts about the charges and the decisions behind them. We build the case with you and bring in research-funding fraud whistleblower lawyers who understand grant and contract billing. We stay beside you from the first call, working to build your strongest whistleblower case.