The lawsuit accuses Marilyn Albert, a former professor of psychiatry at Harvard Medical School, and Massachusetts General Hospital (MGH), where she was conducting research, of submitting a grant application based on manipulated data.

The data showed results from a trial were scientifically significant when in fact they were not, according to the lawsuit.

Brigham and Women's Hospital, which collaborated on the research, is also a defendant in the case. The lawsuit was brought in 2006 under the False Claims Act, a 150-year-old federal law designed to recover government funds appropriated through fraud.

This is the first time a lawsuit dealing with alleged scientific fraud has been allowed to progress to trial under the False Claims Act, according to Michael Kohn, a lawyer with Kohn, Kohn & Colapinto in Washington, D.C.

Kohn represents the whistle-blower in the case, Kenneth Jones, a former statistician at Massachusetts General Hospital, who filed suit in 2006 claiming the defendants violated the act by including false statements in a $15 million grant application to the National Institutes of Health (NIH).

The case was dismissed in the lower court three days before it was due to go to trial. Barring settlement, a new trial could begin later this year in U.S. District Court in Boston, Kohn said.

If the defendants are found guilty, they could pay as much as $45 million to the U.S. government. By law, whistle-blowers in such cases receive 15 percent to 30 percent of funds recovered.

Albert, who is now director of the Division of Cognitive Neuroscience at Johns Hopkins University School of Medicine, declined to comment except to say in an email: "I am confident that there was no misconduct involved."

Both hospitals said they are confident the researchers acted appropriately and according to the highest standards of scientific integrity.

"While it is disappointing that additional time and resources will have to be devoted to defending the institution and its investigators, the MGH remains confident that the resolution of the case will show that the allegations are without merit," Massachusetts General said in a statement.

Brigham and Women's responded with an identical statement.

INFLUENTIAL RESEARCH

Albert's research was part of an ongoing investigation into the structure of the brain as it progresses toward Alzheimer's disease. She specifically hoped to show that it might be possible to predict, years in advance, who might be destined to develop the disease, based on measurements taken over time of certain regions of the brain.

The results of the trial were published in the scientific journal Annals of Neurology in April 2000 and, according to Jones, proved extremely influential.

"The data appeared to confirm what had been suspected by some very prominent scientists, which is that Alzheimer's disease is associated with decreased blood flow to the brain," Jones said in an interview on Thursday. "The MRIs showed the volume of certain parts of the brain was decreasing in the people who were sick."

There are multiple theories about the cause of Alzheimer's disease.

In March 2001, Jones discovered what he believed to be anomalies in the research, specifically in data produced by one of the researchers, Ronald Killiany. The lawsuit alleges that Killiany revised his initial MRI measurements to prove the hypothesis of the trial.

Killiany, now an associate professor at Boston University School of Medicine, did not return a phone call or email seeking comment. Kohn said he was not named as a defendant. In retrospect, Kohn said, "He probably should have been."

Jones took his concerns to Albert, who authorized an investigation into the matter by Killiany's boss, Mark Moss. She declined to appoint an independent investigator, as requested by Jones, according to the lawsuit.

Moss concluded that Killiany's second set of measurements was more accurate than the initial set. Albert accepted Moss's conclusion and proceeded to apply for an NIH grant in November 2001, according to the lawsuit.

The defense argued before the appeals court that it would not have been unusual or inappropriate for Killiany to re-measure patient brain scans as long as he remained blind to the clinical status of the participants, and that this was a matter for scientific debate.

This argument was accepted when the case was initially heard by the lower court in the United States District Court for the District of Massachusetts. On that basis, it dismissed the case in October 2010. Kohn said the court ruled that scientific fraud could not be brought under the False Claims Act, since the case related to a scientific dispute, not fraud.

The appeals court, however, rejected the argument, saying, "We disagree that the creation of the data in question was necessarily a matter of scientific judgment."

The court noted that the lower court's determination "misses the point that the various results produced in this case were obtained by one scientist purportedly using the same protocol."

The government's Office of Research Integrity declined to say whether it is investigating the case.

Jones said he hopes the trial will shed light on the issue of scientific misconduct.

"My interest is in correcting the science and bringing this academic cheating to light," he said, "and maybe sending a message saying, 'You're being watched, and you shouldn't do it.'"

The case is: U.S. ex rel. Jones v. Brigham and Women's Hospital, et al, 1st U.S. Circuit Court of Appeals, No: 10-2301.

(Editing by Michele Gershberg and Douglas Royalty)

• A Permanent Economic Emergency