WSU professor arrested for allegedly defrauding $8 million

From staff reports

A WSU associate professor in the department of civil and environmental engineering has been arrested for allegedly illegally receiving $8 million in federal research grants.

Haifang Wen, 41, of Pullman, along with his brother and sister-in-law, have been charged with conspiring to and making false material statements to federal agencies, perpetrating a wire fraud scheme, and conspiracy to engage in financial transactions with the proceeds of the false statement and wire fraud schemes, according to a press release from U.S. attorney William J. Hochul, Jr.

The three received $8 million in approximately 30 grants from the National Science Foundation, the Department of Energy, the Department of Transportation and the U.S. Department of Agriculture, according to the release.

They allegedly moved the money into bank accounts under their control in Horseheads and Elmira, New York, for personal use, rather than the research into asphalt composition technologies it was meant for.

“As charged, the defendants took money intended to foster innovative research by small businesses, and instead used for their own personal use,” Hochul said in a statement. “This fraud scheme had the effect of depriving deserving businesses of the opportunity for research funds, while simultaneously hurting the very Western New York communities where the research and work were most needed.”

The Wens are accused of fabricating letters of support and investment; providing false information in research grant proposals and reports regarding business entities, business employees, business/research facilities, matching funds and investments; and providing falsified reports and emails regarding how federal research funds were expended.

Wen was released without bond after his appearance in federal court in Spokane Wednesday. A second hearing is scheduled for March 4 in New York.

Reporting by Cody Cottier