Former Penn cancer researcher indicted for stealing federal funds
Steven Johnson allegedly used research funds to fund his own business
May 31, 2014, 1:26 pm · Updated June 10, 2014, 9:15 pm·
Former Penn cancer researcher Steven Johnson allegedly misused federal research money to fund a for-profit business, according to Thursday’s indictment by the U.S. Attorney for the Eastern District of Pennsylvania.
The Department of Justice charged Johnson with eleven total counts of theft and fraud, alleging that he “embezzled, stole and obtained by fraud” property from the United States Department of Defense.
According to the indictment, Johnson and his wife launched a business, called RealTimePrimers, in 2005, while he remained an employee of the University. Johnson’s business advertises the sale of scientific materials related to DNA research.
Assistant to the U.S. Attorney Karen Grigsby said that Johnson’s actions resulted in an “entire investigation by the F.B.I.”
In 2006, Johnson applied for and received a federal grant from the Department of Defense, which was to be used for ovarian cancer research at Penn. The Department of Defense disbursed approximately $65,000 every three months from June 2007 through December 2009, equaling a total allocation of approximately $656,000 in grant funds. The indictment does not specify how much of that money was diverted toward Johnson’s business, although it alleges that he misused property valued at more than $5,000 between 2005 and 2010.
“Mr. Johnson’s termination from Penn occurred soon after we were made aware of his actions and reported them to the proper authorities,” Penn Medicine’s Senior Vice President for Public Affairs Susan Phillips said.
According to the indictment, Johnson used some of the grant money to order DNA testing kits through the School of Medicine and processed them with the University’s equipment. He allegedly then sold the completed “primers” through RealTimePrimers and used FedEx to ship the materials to his customers. The U.S. Attorney consequentially charged Johnson with one count of theft from a program receiving federal funds, as well as 10 counts of mail fraud.
The indictment states that Johnson “devised and intended to devise a scheme to defraud the University of Pennsylvania and the Department of Defense” as least as early as December 2005.
If convicted, Johnson’s maximum possible sentence consists of 210 years of imprisonment, a three-year period of supervised release and a $2.75 million fine, according to the U.S. attorney’s office.
Johnson was an employee of the Perelman School of Medicine from 1998 to 2010, specializing in cancer research. He published several papers during his tenure at Penn, including “Gene expression profiling of malignant mesothelioma.”
Before bail is set, pre-trial services are conducted with the defendant to examine his ties to the community and other factors that might make him a danger or place him at risk of evading trial.
The U.S. Attorney’s o ffice expects Johnson to turn himself in and self-surrender on Thursday to appear before the magistrate and hear his bail set. Grigsby said that bail determined by “the risk of flight and dangerousness to the community.”
“In this instance, I would anticipate that he is not at risk of flight or a danger to the community,” Grigsby said.