Fair Catch signal

[john_faz]

Here's the situation (NFHS):

Punt returner signals for a fair catch but fails to catch the ball in flight. The scrimmage kick is grounded and bounces straight to the player who had just signaled for a fair catch. I whistled the ball dead at the spot of recovery and flagged the returner for invalid fair catch signal. My crew mates said this was not a foul but just a deadball so we picked up the flag.

My questions are: Does the ball become dead after a grounded scrimmage kick is possessed by Team R that signaled for a fair catch? and Is it a foul when a R player signals for a fair catch, fails to catch it in flight and then possesses after the kick is grounded?

Thanks for the help.