Most frauds are discovered through tips from reporters. And most reporters are your own employees. This is how the Association of Certified Fraud Examiners (ACFE) has reported for years. Therefore, it is important that reports are recognized and investigated properly and in a timely manner. If they only surface years later, the consequences can be many times greater. So too at Leiden University Medical Center, according to publications by Follow the Money and Omroep West.
In 2005, the company Percuros BV was founded at Leiden University Medical Center (LUMC) to secure European funding for research projects. The director of Percursor is an outside specialist. The office is also used by the medical faculties of other university hospitals in the Netherlands. In itself, this is not surprising; securing European research funds is specialized work that is often outsourced.
Between 2013 and 2022, more than €42 million in European funding for 16 international research projects will be awarded through Percuros. LUMC will receive a total EU contribution of over 6.2 million. According to the article in Follow The Money, the grants specialist’s management fee is about 5.3 million. So the commission for Percuros averages about 12 percent.
To secure additional research funds, Percuros places researchers at another hospital or university, often abroad, to conduct some of the research. After all, the European Commission pays extra for a doctoral student who goes on secondment. However, many of these postings appear to exist only on paper.
These are often young researchers, at the beginning of their careers and therefore vulnerable. They do not want to jeopardize their doctoral research. Without knowing it themselves, they are working abroad on paper while in reality they are working at LUMC.
In 2019, LUMC’s risk management department is conducting a study of this practice. It then turns out that Percuros has been acting risky and fraudulent since at least 2017. In all, as many as 59 red flags are identified. It points out the significant risk of intentional fraud by Percuros with the motive of “personal financial gain. This puts LUMC at high risk of not complying with grant rules.
Yet the hospital fails to notify the grant provider, the “European Research Executive Agency (REA). On the contrary, Percuros is being brought in for nine new projects. It seems that the necessary management measures are lacking within the hospital. Incidentally, LUMC currently denies that fraud was suspected at the time. However, a code of conduct and guidelines would subsequently have been established for this type of project.
A researcher will receive a PhD position at LUMC in 2020. Within a European research group, she was going to collaborate on a vaccine against pancreatic cancer. Curiously, she starts her new job without an employment contract, despite repeatedly asking for one. After a few months, she receives a contract stating that she is working for a Scandinavian company, but from LUMC. By the way, this does take place during the corona period, when many employees have to work from home and it is difficult to travel internationally.
In the spring of 2021, she suddenly has to come for an interview with her professor and with the director of Percuros. An auditor from the subsidy fund would come and they must not know that she worked full-time in Leiden. She also needs to update her LinkedIn profile. The researcher refuses to cooperate on this. However, during an inspection in the summer of 2021 by the REA, she keeps quiet out of fear.
In the fall of 2021, she will be put on the record at Percursor. This shows a letter from the foreign company where the researcher supposedly works, stating that no one has ever seen her in the office there. The researcher points out that according to her contract, she works 100 percent for LUMC and refuses to go abroad. In doing so, she indicates that it is impossible, because she is originally from the Middle East and would have problems with her visa. The director of Percursor bursts into a rage.
Shortly thereafter, the researcher is fired. This brings her scientific career at LUMC to an early end. And she gets burnout.
The researcher discusses this with a department at the hospital that helps foreign students with problems. And in December 2021, the researcher will discuss the issue with the dean, who is also vice chairman of LUMC’s Board of Trustees. A second interview with him will take place in January 2022, which will include LUMC’s head of legal affairs. Three months later, however, nothing has changed. LUMC later indicates that this conversation missed the signal that the dismissal was related to the fraud.
In April 2022, the researcher reported the fraud to the European Research Executive Agency (REA) in Brussels. The latter will start a comprehensive investigation thereon in October 2022.
In December 2022, the REA informed the LUMC board that the hospital was suspected of willful violation of grant agreements and of concealing these irregularities. The fraud was committed in part through “ghost posting” such as that of the reporter, who worked abroad only on paper. The REA concludes that LUMC not only knew about it, but voluntarily accepted and coordinated it, and sought and used every means possible to conceal it. Only at that point does LUMC end its collaboration with Percuros. In June 2023, Percuros will be deregistered from the commercial register.
LUMC is launching an internal investigation. Three employees are summarily dismissed. However, the professor involved and the Dean/Vice President of the Executive Board are not fired and are still working at LUMC.
Following the publications by Follow the Money and Omroep West, the vice chairman of LUMC’s Board of Governors is temporarily resigning his position.
It appears that the reports were not timely recognized by the investigator as a whistleblower report. Or perhaps the whistleblower procedure was unclear or unknown to the investigator? Finally, she decided to go to the authorities and to the press. Is that allowed? Would you like to know more about this? Then attend our Whistleblower Protection Act course on December 1.
