BOSTON—A small army of lawyers representing Harvard, two co-defendants and the U.S. government sweated a Federal District Court judge’s pointed questions yesterday, with the prospect of $102 million in damages hanging over both sides’ heads.

Attorneys representing the University, Economics Professor Andrei Shleifer ’82 and former Harvard employee Jonathan Hay were in court to defend their arguments that the judge should dismiss, on the basis of undisputed facts, a fraud suit brought against them by the U.S. government.

Assistant U.S. Attorney Sara M. Bloom reasserted the government’s claim that these same undisputed facts warranted an award of $102 million without having to resort to a jury trial.

At the end of the nearly four hour-long hearing in South Boston’s Moakley federal courthouse, the case was no closer to resolution five years after the government’s first allegations of wrongdoing and two years after its suit was filed.

Judge Douglas P. Woodlock did not say when he would rule on the parties’ motions for summary judgment submitted in early summer and argued yesterday.

But in his questions to the four sets of lawyers, Woodlock suggested his views on crucial aspects of the case, partially undercutting several of Shleifer and Hay’s primary defenses while also expressing skepticism at the government’s attempts to seek damages under the False Claims Act (FCA).

On a number of points, Woodlock suggested the arguments would have to go before a jury.

The government’s case hinges on allegations Shleifer and Hay broke agreements Harvard made with the U.S. Agency for International Development (USAID) that funded a University-run economic reform program in Russia in the mid-1990s.

Shleifer was project director for the program run out of the now-defunct Harvard Institute for International Development (HIID). Together with Hay, Shleifer advised the Russian government on the privatization of their economy. USAID provided the project with $50 million in funding.

At the same time, Shleifer and Hay directly or indirectly invested hundreds of thousands of dollars of their own money in Russia.

Evidence released this summer details investments made by Shleifer and his father-in-law in Russian equities, Hay’s investment in a mutual fund with holdings entirely in Russia and Hay’s involvement in his girlfriend’s efforts to create the first Russia-based mutual fund.

The government began questioning these investments in 1997, originally as part of a criminal investigation. Harvard removed Shleifer and Hay from the project, but retained Shleifer as an economics professor.

In 2000, the government sued alleging that, while not criminal, Shleifer and Hay’s actions violated the conflict of interest restrictions contained in Harvard’s contract with USAID.

The investments, the government says, also undercut the project’s mission of providing fair and unbiased advice on the privatization of Russia’s economy.

The government says Harvard was responsible for the oversight of Shleifer and Hay and that all three are liable under FCA.