The U.S. Department of Justice has settled with a San Jose-based artificial intelligence company for $1.5 million that was accused of improperly using grant money it was ineligible to receive.

Federal prosecutors said Monday that Vimaan Robotics, Inc., develops computer vision and AI “warehouse management solutions.” It allegedly violated the False Claims Act by improperly accepting and drawing down grant funds.  

The settlement relates to a Small Business Innovation Research (SBIR) Phase II grant that Vimaan obtained from the National Science Foundation (NSF).   

“The terms and conditions of the SBIR grant preclude companies that are majority-owned by one or more venture capital operating companies from applying for or receiving such an award,” the U.S. DOJ said.   

Vimaan was accused of receiving the award on April 16, 2020, and failing to disclose that it had become majority-owned by one or more venture capital companies one month prior, making it ineligible for the award.   

Between June 2020 and August 2022, Vimaan allegedly submitted 14 separate requests to NSF for disbursement of the award funds and falsely certified its eligibility to receive the award funds in each of these payment requests. 

“Federal small business research grants awarded by NSF are designed to support and foster innovative research by small businesses, not to provide taxpayer funding for businesses primarily owned by venture capital firms,” said Acting U.S. Attorney Patrick D. Robbins. “When companies evade program restrictions and obtain grants even though they are not eligible, this office will vigorously enforce the False Claims Act to ensure that federal dollars go to proper recipients.” 

Katy St. Clair got her start in journalism by working in the classifieds department at the East Bay Express during the height of alt weeklies, then sweet talked her way into becoming staff writer, submissions editor, and music editor. She has been a columnist in the East Bay Express, SF Weekly, and the San Francisco Examiner. Starting in 2015, she begrudgingly scaled the inverted pyramid at dailies such as the Vallejo Times-Herald, The Vacaville Reporter, and the Daily Republic. She has her own independent news site and blog that covers the delightfully dysfunctional town of Vallejo, California, where she also collaborates with the investigative team at Open Vallejo. A passionate advocate for people with developmental disabilities, she serves on both the Board of the Arc of Solano and the Arc of California. She lives in Vallejo.