A federal grand jury in the District of Maryland has indicted Hoau-Yan Wang, a 67-year-old tenured medical professor from Pennsylvania, for allegedly defrauding the U.S. National Institutes of Health (NIH) of approximately $16 million in federal grant funds. Wang, who also served as a paid advisor and consultant to a publicly traded Texas biopharmaceutical company, is accused of fabricating and falsifying scientific data in grant applications submitted to the NIH from May 2015 through April 2023.
According to court documents, the fraudulent grant applications sought funding for research into a potential treatment and diagnostic test for Alzheimer’s disease. These applications resulted in the award of approximately $16 million in grants from 2017 to 2021, part of which funded Wang’s laboratory work and salary. The indictment alleges that Wang’s work under these grants pertained to the early developmental phases of the proposed drug and diagnostic test, known as Phase 1 and Phase 2 by the U.S. Food and Drug Administration.
The indictment further claims that Wang falsified scientific data regarding how the proposed drug and diagnostic test were intended to function and their impact on certain indicators associated with Alzheimer’s disease after treatment. Wang faces charges including one count of major fraud against the United States, two counts of wire fraud, and one count of false statements. If convicted, he could face up to 10 years in prison for major fraud, up to 20 years for each count of wire fraud, and up to five years for false statements.
Principal Deputy Assistant Attorney General Nicole M. Argentieri from the Justice Department’s Criminal Division, along with FBI Washington Field Office Assistant Director David Sundberg, announced the indictment. The FBI Washington Field Office is leading the investigation into this case. Trial Attorney Andrew Tyler, Deputy Chief Anna Kaminska, and Assistant Chief Leslie Garthwaite from the Criminal Division’s Fraud Section are prosecuting.
An indictment is merely an allegation; all defendants are presumed innocent until proven guilty beyond a reasonable doubt in court.
The Department of Justice said Friday that Professor Hoau-Yan Wang was indicted by a Maryland grand jury for an alleged $16 million fraud against the National Institutes of Health. According to the indictment, the scheme involved falsifying data for grant applications related to a potential Alzheimer’s treatment. Wang, a neuroscientist and a faculty member at the City College of New York, did not immediately respond to a request for comment.
Shares of biotech company Cassava Sciences Inc. plummeted on Friday after the indictment was announced. Cassava, in a statement commenting on the charges, said: “Wang’s work under these grants was related to the early development phases of the company’s drug candidate and diagnostic test and how these were intended to work. Dr. Wang and his former public university medical school have had no involvement in the Company’s Phase 3 clinical trials of simufilam.” Simufilam is the Austin, Texas-based company’s drug candidate for Alzheimer’s treatment.
Cassava’s stock finished 34.8% lower on Friday, though shares were rebounding 7.3% after hours. In October, the publication Science reported that an investigation by the City University of New York had accused Wang of “scientific misconduct” across multiple research papers, many of which provided key support for the Alzheimer’s drug. Cassava, in response, said at the time that the alleged “misconduct” was related only to record-keeping issues at the university and tried to link the matter to short sellers.
The Justice Department’s announcement on Friday didn’t mention Cassava, the university, or the drug directly. It said Wang was “a tenured medical professor at a public university’s medical school, as well as a paid advisor and consultant to a publicly traded Texas biopharmaceutical company.” The department said Wang was charged with one count of major fraud, two counts of wire fraud, and one count of false statements. If convicted, he faces a maximum of 10 years in prison for the major fraud charge, 20 years in prison for each count of wire fraud, and five years for the false statements.
“From approximately May 2015 through approximately April 2023, Wang allegedly engaged in a scheme to fabricate and falsify scientific data in grant applications made to the NIH on behalf of himself and the biopharmaceutical company,” the Justice Department said in a statement. “As alleged, the fraudulent grant applications to the NIH sought funding for scientific research of a potential treatment and diagnostic test for Alzheimer’s disease and resulted in the award of approximately $16 million in grants from approximately 2017 to 2021, part of which funded Wang’s laboratory work and salary,” the statement continued.
The indictment further alleged that Wang’s work under the grants was related to early development and testing of the drug. The alleged falsification, the department said, related to how the drug and test were supposed to work and “the improvement of certain indicators associated with Alzheimer’s disease after treatment with the proposed drug.”
Shares of Cassava have fallen 45% so far this year.
Source: UPI, MarketWatch, Dow Jones Newswires
