KANSAS CITY, Kan. — KalScott Engineering Inc., its president, Thomas Sherwood, and vice president Suman Saripalli will pay $672,352 to settle allegations that the company submitted false claims to obtain grant funds from the Small Business Innovation Research and Small Business Technology Transfer Programs, U.S. Attorney for Kansas Stephen McAllister said Monday.


KalScott Engineering Inc. is located in Lawrence.


The Small Business Innovation Research and Small Business Technology Transfer Programs are competitive programs that encourage American small businesses to engage in research on behalf of the federal government that has the potential for commercialization. Grant recipients must designate a principal investigator and key personnel who will work on the grant-funded project. The small business itself must perform a majority of the grant-funded work.


Between April 2012 and July 2015, KalScott received Small Business Innovation Research grants from the National Institutes of Health, the National Aeronautics and Space Administration, and the Air Force; the company received a Small Business Technology Transfer Program grant from the Navy.


The U.S. contends that the company wrongfully obtained grant funds from NASA and the Navy because KalScott designated Saripalli as a principal investigator when he was not eligible to serve in that role. In addition, it is alleged that KalScott did not perform a majority of work under the Air Force grant and that KalScott used different key personnel than it listed in its proposal to obtain the NIH grant.


"Recipients of federally-funded grants must adhere to the program requirements," McAllister said.


This case was handled by Assistant United States Attorney Jon Fleenor.


The claims resolved by this agreement are allegations only, and there has been no determination of liability.