A University of Maryland, Baltimore official resigned Thursday amid inquiries into allegations that he defrauded an Oklahoma university of more than $1 million in a previous job and diverted the money to businesses from which he financially benefited.
Daniel Webster Keogh joined UMB in April as a director in the New Ventures program, which focuses on technology and research initiatives. His hiring came about one year after Oklahoma State University filed a lawsuit against him, alleging that he and his company lost $1.675 million paid by the university-owned research company OSU-Multispectral Laboratories.
UMB officials, who learned of the lawsuit from The Baltimore Sun on Wednesday, said Thursday that Keogh resigned from his post, where he was hired at a salary of $135,000 and was responsible for assessing and identifying opportunities to market the university's technology products.
Alex Likowski, spokesman for UMB, said the university couldn't comment on the litigation or any investigation related to the Oklahoma case. But he confirmed Keogh's resignation from what he called "a big role" at the university.
The New Ventures program is part of UM Ventures, a joint research effort between the Baltimore and College Park campuses.
Keogh's attorney, Daniel G. Webber Jr., said his client resigned "in order to keep UMB from becoming embroiled in this unrelated litigation, which could now take until 2015 to resolve."
Keogh, 43, declined to comment. In a countersuit against Oklahoma State University and others, he has denied the accusations.
Likowski said the university conducted a background check and thoroughly vetted Keogh's credentials and references in November and December, and that he was cleared to be hired for the position.
The university was not aware of the lawsuit, but a criminal and civil background check would not have turned up cases where a disposition had not been reached, he said.
According to the lawsuit filed by Oklahoma State University, Keogh served as a laboratory director through a contract that his company, Triton Scientific, had with OSU-Multispectral Laboratories, or UML, which provides scientific research services. Its clients include the federal government.
The lawsuit — which has not been resolved — alleges a series of schemes to defraud UML of millions of dollars.
The lawsuit accuses Keogh of a fund diversion scheme in which UML paid $1.675 million to Keogh, who promised the payment would bring in millions in funding for UML projects. He deposited the money into an overseas account, the lawsuit said. UML never got back the money it paid, nor did it receive the money it was promised, the suit said.
The lawsuit concludes that the university believes that Keogh and others "have personally obtained some or all of this money."
A spokesman for Oklahoma State University declined to comment on the case, citing pending litigation.
But Webber says his client was also a victim of the scheme.
In a countersuit filed months after the OSU suit, Keogh contended that UML failed to pay debts to Triton and that its allegations and breach of contract have cost him about $75,000.
Keogh said in the countersuit that he wired the money to the account as directed by an attorney who worked for the national law firm Squire Sanders. He said the attorney acted on behalf of a foundation that promised to fund an $8 million project at UML and pay an additional $5 million to Keogh's company that would also go toward UML operations.
The countersuit said none of the money was delivered, nor was the $1.6 million refunded from the account.
The countersuit also names Squire Sanders as a defendant, but a spokesman for the firm said that the attorney — who is no longer employed there — did not represent clients of Squire Sanders.
"Neither Oklahoma State University and its affiliates, nor Dr. Keogh and any of his Keogh Entities, have ever been clients of the firm and we strongly deny any allegations of misconduct made against the firm," Angelo Kakolyris, spokesman for Squire Sanders, said in a statement.
Kakolyris said the former employee admitted in court proceedings that his dealings with Keogh's company were "conducted entirely on his own time for his benefit and not as an agent or attorney of the firm."
Keogh's attorney said the money has "disappeared."
"After over a year of litigation, no one at OSU or anywhere else has produced one shred of evidence that Dr. Keogh or any related companies benefited from the funds," Webber said. "Unfortunately, OSU chose to terminate the contract and take other inappropriate actions first and find out the facts later, which greatly damaged Dr. Keogh."
Additionally, the lawsuit alleges that Keogh defrauded UML of $75,000 by submitting invoices from several "related entities" from which he stood to benefit financially, including a clothing boutique in Oklahoma owned by his wife's company as well as another relative's business.
Webber said his client denies the fraud allegation and that the invoices were legitimate.
Webber said other claims in the suit, such as allegations of Keogh's mismanaging government contracts, "remain unfounded and show a lack of understanding about the way such contracts are handled."
He said the parties have been ordered to mediation.