Well, if things work the way they normally do, Professor Blank's "breakthrough" theory wouldn't be accepted by anyone else in his field until they'd replicated it. So ol' Blank knows he's got a couple of options:
1. Hide the negative results, as you postulate, and hope nobody notices. If he's as smart as you say, he probably won't try this - regardless of funding. See, the thing is, the history of science is littered with the broken careers of people who tried this and got caught (cf., cold fusion). The fact that this theory is so incredibly novel and earth-shaking that it can generate millions of dollars in subsequent funding (I really really REALLY want to know where this guy is getting those kinds of research bucks - I could use some of it) means that God and everybody in the field - and even outside the field - will be minutely looking at the research; whether through base motives like cashing in on the gravy train or jealously seeking to tear it down, or through more noble motives like the excitement of being involved in groundbreaking discoveries that significantly enhance our knowledge of the universe. In other words, the more earth-shattering the discovery, the more people are going to be picking at it with fine-toothed combs.
2. Beat everyone to the punch by publishing the negative results. This can actually be done in such a way that Blank not only gets to keep his funding (assuming the research is promising enough), but comes out smelling like a hero. If he was unethical enough (which you seem to suggest), he could even spin it to seem like the result was expected! This is probably the more likely result the way you've set up your hypothetical situation, honestly.
3. If Blank's REALLY unethical, he could conceivably steal the junior scientist's research and claim it for his own. Although the risk of exposure is pretty high, if 'ol Blank is as bad as you say, he might risk it. The junior scientist will quite possibly remain in obscurity - eclipsed by the big name. Ever hear of Maurice Wilkins and Rosalind Franklin? Alternatively, Blank could simply offer the junior scientist "joint publication". The big name is STILL likely to get the lion's share of the credit - and be the one mentioned in the history books (eg. Russell Wallace and Charles Darwin).
4. Coopt the insufferable little twit who dared to show the theory wrong by dangling some of that $$$$ funding in front of his eyes -especially if he's the poor starving scientist you portray. Blank would still get top billing on any publications (anyone who's been a grad or post-grad researcher knows how this works).
#2 is the MOST likely, with the damage control approaches in 3 and 4 coming in a distant second. The most UNLIKELY is the direct approach you suggest in #1 (hiding the research), for the reasons I noted.
I think you need to look a little harder at how research and the peer-review process is actually done in real life. That would have answered your question, I think.
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