The director of a UK company was jailed for 18 months on 13 September for stealing over €174,000 from a European Union funded research project to develop an alternative thickening agent to gelatine (OLAF press release, BIS press release).
Paul Mulholland, director of BI Industries (Holdings) Ltd, a company providing business services based in Burton-on-Trent, near Derby, was coordinating the two year research project which began in 2003 and involved several other research companies and science institutions from around Europe.
In his role, Mulholland was responsible for distributing the funds to the project’s participants. The European Commission intended to award the project a total of € 547,656 under its fifth framework programme for research (FP5), but Mulholland directed a large chuck of this money into the bank account of another company he owned, which was not part of the project.
The research project was not completed and the stolen funds have not been recovered.
A spokesman for the European Commission’s research directorate said that since FP5 they have tightened up the financial checks made on the coordinators of research projects.
European research leaders said they were not concerned that the European Commission would further tighten its already strict financial rules and checks to avoid fraudulent use of EU funds as a result of Mulholland’s actions.
Helga Nowotny, the president of the European Research Council, said the case “should not lead to rash conclusions to tighten even further an already tight financial regulation system.”
“The EU regulations are already very strict and probably nothing could have prevented such blatant criminal conduct of an individual,” she adds.
(See Nature’s news story on the problems the ERC has suffered because of tight EU rules.)
Ernst Rietschel, president of the Leibniz Association of German Research Institutes and chairman of an expert group that evaluated the sixth framework programme for research, says Commission bureaucracy is “always a concern”. (See Nature’s news story on Rietschel’s report.) But he does not think the Commission would now toughen up its rules becuase researchers and companies have expressed such frustration at them over the past few years.
“The Commission has made clear both its intention to simplify the rules governing research funding and its determination to ensure that such simplification does not weaken protection of taxpayers’ money,” the Commission spokesman adds. (See Nature’s news story on efforts to simplify EU research funding.)
Mulholland was sentenced to a further two and half years in jail after pleading guilty to an additional eight fraud offences, that were unrelated to the research project. The sentencing took place at Wolverhampton Crown Court.