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. Last Updated: 07/27/2016

Tentative Deal Is Reached in Russia-Harvard Fraud Case

BOSTON -- The U.S. Justice Department has tentatively settled a 5-year-old civil fraud complaint about investments a Harvard University professor and a former staff member made while working on a federal contract to help privatize Russia's economy.

Details will be made public within 60 days, after an agreement has been signed, a spokeswoman for U.S. Attorney Michael Sullivan's office said.

It was unclear whether economics professor Andrei Shleifer, former Harvard employee Jonathan Hay and university officials had agreed to admit wrongdoing, or how much they will pay, The Boston Globe reported Tuesday.

Shleifer, who remains on Harvard's faculty, and Hay, a Harvard law school graduate working as a lawyer in London, were top officials at the law reform project of the now-defunct Harvard Institute for International Development.

U.S. District Judge Douglas Woodcock found that Shleifer and Hay conspired to defraud the government by making personal investments in Russia while working on a federal contract to assist in Russia's transition to capitalism.

The judge ruled last year that Harvard had breached its contract with the U.S. Agency for International Development, but he dismissed a charge that the school knowingly deceived the government. The government agency paid $34 million for the contract after Shleifer and Hay began making investments, but the government was seeking triple damages under the False Claims Act. Harvard has called the lawsuit "an attempt on the part of the government to achieve a more than $100 million windfall."