From the Wall St. Journal (free for seven days): As Universities Get Billions in Grants, Some See Abuses: Cornell Doctor Blows Whistle Over Use of Federal Funds, Alleging Phantom Studies. From the article:
Kyriakie Sarafoglou had only worked at Cornell University's medical school here for a few months when she says she suspected something was amiss. Cornell had received a five-year, $23 million grant from the National Institutes of Health for a center conducting studies of children's diseases. But several research projects Cornell had said it would carry out existed only on paper. The money for the children's center was being used to treat many adults, and the center enrolled people as study subjects who didn't have the diseases being studied.
After digging deeper, Dr. Sarafoglou, a 43-year-old native of Greece, concluded that Cornell was defrauding American taxpayers. Cornell, she believed, was taking grant money for studies and using it to support standard care for patients at New York-Presbyterian Hospital, a Cornell affiliate on Manhattan's Upper East Side.
Update: I knew the guys at Health Care Renewal would be all over this one. Here's the post.