(Adds details from settlement, background, byline)
By Jonathan Stempel
March 25 (Reuters) - Duke University agreed to pay $112.5 million to settle claims it knowingly submitted fake data in applications for federal research grants, the U.S. Department of Justice said on Monday.
The accord resolves whistleblower claims by a former Duke laboratory research analyst who said the university knew that former biologist Erin Potts-Kant used fraudulent data to obtain grants from the National Institutes of Health, the Environmental Protection Agency and other agencies.
False claims were submitted in connection with 30 grants, starting in 2006, causing the agencies to award funds they would not otherwise have paid out, the Justice Department said.
"We expect Duke researchers to adhere always to the highest standards of integrity, and virtually all of them do that with great dedication," Duke President Vincent Price said in a statement.
"When individuals fail to uphold those standards, and those who are aware of possible wrongdoing fail to report it, as happened in this case, we must accept responsibility, acknowledge that our processes for identifying and preventing misconduct did not work, and take steps to improve," he added.
Duke said it discovered the fraud after Potts-Kant was arrested in 2013 for embezzling money from the Durham, North Carolina-based university.
It said Potts-Kant later pleaded guilty to two counts of forgery and paid restitution.
At least 16 of Potts-Kant's research papers have been retracted, according to the website Retraction Watch.
Joseph Thomas, the whistleblower, said some of Potts-Kant's work related to research by her supervisor Michael Foster, a former professor of medicine, involving the testing of mice.
Thomas will receive $33.75 million, or 30 percent, of the settlement. His lawyers were not immediately available for comment.
The False Claims Act lets whistleblowers sue on behalf of the federal government and share in recoveries.
"Taxpayers expect and deserve that federal grant dollars will be used efficiently and honestly," Matthew Martin, the U.S. Attorney for the Middle District of North Carolina, said in a statement.
Lawyers for Potts-Kant and Foster did not immediately respond to requests for comment. (Reporting by Jonathan Stempel in New York; Editing by Cynthia Osterman)
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