Professor denies knowing of computer scam - Cleveland 19 News Cleveland, OH

Professor denies knowing of computer scam

CLEVELAND (AP) - A world-renowned medical researcher accused of taking part in a scheme to defraud Compaq Computer Corp. of $2.5 million plans to finger her ex-lover as the person behind the scheme, according to court documents.

Dr. Janice Douglas, 60, of suburban Bratenahl, a professor at Case Western Reserve University, goes on trial Monday in U.S. District Court in Boston along with Herbert Cates, 45, of Kansas City, Kan., and Dennis McIntosh, 50, of Lee's Summit, Mo.

Douglas' ex-lover, Leroy A. Sallee, 44, of Ashtabula, Ohio, pleaded guilty July 22 to mail fraud, wire fraud and interstate and foreign shipment of stolen goods. He might be asked to testify against the others, said Assistant U.S. Attorney Peter Mullin.

Federal prosecutors said the four negotiated a $2.5 million educational discount on $5.6 million worth of computer equipment ordered from Houston-based Compaq in February 2002.

They got the discounts by saying the purchase was on behalf of Case Western, which would use the equipment in a clinical trial of a new drug led by Douglas, prosecutors said.

But there was no such study, and Sallee intended to resell the equipment outside the country, prosecutors said. Compaq said it was never paid.

Sallee rented a warehouse in Tewksbury, Mass., to store the shipment and later reshipped it to customers in Canada and England, prosecutors said.

Federal agents recovered $1.6 million in equipment from the warehouse and $1.8 million in cash from Sallee's bank account in Middletown, Ohio.

Douglas -- division chief for the high blood pressure program at University Hospitals of Cleveland and professor of medicine, physiology and biophysics at Case Western -- has been on paid leave since she was indicted in September.

Since being hired in 1976, she has become world-known as an expert on high blood pressure and kidney disease and has attracted millions of dollars of federal research grants to the university and its medical school.

Douglas has declined to comment. Her lawyer, Willie Davis of Boston, did not return calls seeking comment.

Davis has argued in court records that Douglas was duped by Sallee, who used her office while she was away.

"The scheme to defraud was devised by Sallee, who took advantage of their friendship and used the office of the defendant without her knowledge to implement the scheme," Davis wrote.

But prosecutor Mullin's pretrial papers said the Federal Bureau of Investigation obtained phone records showing dozens of communications between the two. The FBI agents found a script on Sallee's computer that Douglas was to use when Compaq sales reps asked technical questions.

In a conference call, Douglas talked to the company about the phony research, the drug company funding it and the need to keep the source of the grant secret, Mullin's brief said.

In March 2002, Compaq officials came to Cleveland, showed university officials the purchase order and learned it was invalid.

Douglas has denied any knowledge of the order or fake research to FBI agents and university attorneys, Mullin's brief said.

(Copyright 2003 by The Associated Press. All Rights Reserved.)

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