WASHINGTON (CN) - A one-time computer technician for the Laogai Research Foundation failed to prove his former employer misused grant funds and engaged in improper lobbying, but may pursue claims he was fired for making the allegations, a federal judge ruled.
Relator Pencheng Si sued Laogai, a human rights organization focusing primarily on China, and the affiliated China Information Center in 2009.
Si claimed in his lawsuit that executive director Harry Wu used federal grant money for personal use, grossly overstated his qualifications on grant applications, and engaged in illegal lobbying activities, all in violation of the False Claims Act.
He also claimed Wu fired him after he unearthed and reported the information.
"In short, the lynchpin of the Court's ruling in this case is the fact that, although Relator appears to have gone back to the proverbial drawing board in crafting the amended complaint (his amended complaint is nearly double the length of his original pleading and provides more detail regarding defendants' business practices and internal finances), the amended complaint nevertheless still lacks a sufficient factual basis for any plausible fraud claim under the FCA, and fails even to identify clearly how the alleged facts support each purported claim for relief," ruled U.S. District Judge Ketanji Jackson.
But after dismissing Si's False Claims Act allegations, Judge Jackson ruled that Si brought sufficient allegations to support wrongful termination and retaliation claims.
Wu, who says he spent more than 20 years in a Chinese prison labor camp, accused the company that supplied preserved human corpses for the controversial "Bodies" exhibition, of trafficking the corpses of executed Chinese prisoners for the show. The claims got him sued for defamation.
Si paints a different picture of Wu, referring to him as "a font of ethical and financial impropriety."
According to the ruling, Si says he was fired after reporting that Wu lied about his history, engaged in illegal lobbying, submitted false claims and lied on grant applications.
"It may well be that, once discovery proceeds in this case, Relator will be unable to establish that there is a factual basis for his retaliation action, perhaps because Relator did not actually raise concerns about false claims, or because Wu did not, in fact, learn of Relator's report of fraud and suggestion of taking outside action to a board member, or otherwise," the judge states. "But based on the facts alleged in the amended complaint, Relator has stated a plausible retaliation action even as he fails to state sufficiently any claim that fraud occurred in violation of the FCA."
Wu serves as director of the Washington, D.C.-based foundation, which raises public awareness about the forced-labor prison camp system in China. He says he was arrested in 1960 at the age of 23 for speaking out against the communist regime in China.
Read the Top 8
Sign up for the Top 8, a roundup of the day's top stories delivered directly to your inbox Monday through Friday.