UCLA Professor, Four Relatives Accused of Fraud Involving Grants

A UCLA electrical engineering professor and four of his relatives were indicted Wednesday by a federal grand jury for allegedly bilking the university, the government and private companies of about $1 million through elaborate purchasing and payroll frauds on research grants.

The 23-count indictment announced by the U.S. attorney’s office in Los Angeles alleged that Prof. Cavour Yeh put two sisters and a brother on payrolls for research projects when in fact those relatives did no work and kicked back money to Yeh with the help of a brother-in-law. In addition, Yeh allegedly created a company to sell scientific equipment to UCLA at highly inflated prices, the indictment charged.

Yeh’s attorney, Brian O’Neill, denied the charges and claimed that the professor was a victim of anti-Asian bias and professional jealousy. UCLA’s engineering department is making Yeh a scapegoat “to distract attention from a pattern of abusive government contracting practices at UCLA, not unlike those which have been revealed at other major universities, such as Stanford University,” O’Neill contended.

Darlene Skeels, UCLA’s director of public information, said Wednesday it would be inappropriate to respond directly to O’Neill’s statement. Skeels stressed that the university first investigated the Yeh case and then turned it over to prosecutors. “The case is now in the legal system and we have full confidence that the legal system will do its charge properly,” she added.

In March, 1989, UCLA filed a $500,000 civil case involving similar allegations against Yeh. That case is pending and will be postponed until the federal criminal charges are resolved, Skeels said.

Also on hold is a UC disciplinary review that could strip Yeh, 55, of tenure. A UCLA professor since 1967, Yeh was placed on leave with pay in March, 1989. His $89,600 annual salary was halted in May, 1990, Skeels said.

As a specialist in fiber-optic communications, Yeh was principal or co-principal researcher on grants that totaled $1.9 million between 1980 and 1989, according to the indictment announced by U.S. Atty. Lourdes G. Baird. Among Yeh’s funding sources were the U.S. Army, the National Science Foundation and the U.S. Environmental Protection Agency.

The professor’s relatives hid their relationships with him when they filled out job applications to become his assistants at UCLA, despite campus rules requiring disclosure of close family ties with other employees, Assistant U.S. Atty. Nathan J. Hochman said. Cavour Yeh allegedly prepared a written script detailing how his brother, Richard, should conceal his relationship to the professor. Richard Yeh reportedly told UCLA investigators in March, 1988, that he was only a friend of Cavour.

The federal indictment portrayed a complicated system of payments among the Yeh relatives and kickback arrangements involving third-party mailing addresses and laundered bank accounts. Over the years, UCLA reportedly paid a total of $159,358 to Richard Yeh, $220,111 to a sister named Wei Li and $77,658 to the other sister, Victoria Hsia, even though the sisters “did not perform any work on the UCLA grants/contracts as represented,” according to the indictment. The professor allegedly tried to hide the identity of his sister Wei Li by describing her in a contract with the Aerospace Corp. as a male graduate student. Victoria Hsia’s husband, Alan Hsia, allegedly helped arrange the payment system.

With a stock transfer to a friend, Cavour Yeh tried to hide his ownership interest in EMtec Engineering Inc., a company he helped incorporate in 1974, authorities said. Yeh bought technical supplies for his UCLA experiments and federally funded research from that firm and “falsely represented that no company other than EMtec was capable of furnishing the scientific equipment within the budget and time-frame allotted,” the indictment stated.

The government alleged that EMtec’s prices were substantially above market rates. However, defense attorney O’Neill said the equipment prices were “substantially less than a large engineering contractor would have charged.” O’Neill declined to specifically comment on the allegations involving payroll fraud and Yeh’s relatives.

“Dr. Yeh expects to be exonerated of all material allegations of wrongdoing through the judicial process and hopes that all persons will withhold their judgment until the judicial process has been concluded,” O’Neill said Wednesday.

Yeh and his four relatives face various charges, including fraud conspiracy, mail fraud and making false statements. If convicted, the professor faces a maximum penalty of 115 years in prison and a $5.75-million fine. Richard Yeh, 53, and Wei Li, 56, would face 70 years in prison and a $3.5-million fine, and Victoria Hsia, 58, and Alan Hsia, 60, would face a maximum of 50 years in prison and a $2.5-million fine. The defendants all live in Los Angeles. Arraignment is expected Friday.