Former Georgia Tech official pleads guilty to fraud

The Georgia Tech Research Institute. AJC FILE PHOTO.

The Georgia Tech Research Institute. AJC FILE PHOTO.

The former chief scientist at the Georgia Tech Research Institute pleaded guilty to conspiring to defraud Georgia Tech and the CIA, federal prosecutors announced late Friday.

From early 2007 through late 2013, James G. Maloney, 57, of Marietta, and others engaged in a scheme to defraud Georgia Tech and the CIA. They used a procurement card that was supposed to be used for official business to purchase approximately $200,000 on four-wheelers, televisions, iPads, digital cameras, sunglasses, solar panels for a private hunting club and other personal expenses, the U.S. Attorney’s Office for the Northern District of Georgia said in a news release. They also used the card to pay for remodeling and maintenance expenses related to six rental properties they owned together, prosecutors said.

Georgia Tech discovered the questionable charges during a routine audit in early 2013, according to the news release. Maloney asked others involved in the scheme to help him “weave a story” to mislead Georgia Tech auditors, authorities said. Maloney also suggested that they say the items were purchased for a classified CIA contract, and that the auditors did not need to know further details.

James D. Fraley, III, then a senior research technologist at Georgia Tech, fearing that Maloney would seek to shift the blame to him, recorded the cover-up meetings and provided those recordings to the FBI, prosecutors said.

Fraley and James Acree, Georgia Tech Research Institute’s program manager at the time, pleaded guilty to the same charge in 2016.

“These defendants violated the trust placed in them by Georgia Tech and the CIA in allowing their judgment to be clouded by greed,” said U.S. Attorney Ryan K. Buchanan. “The seven-year delay in resolving Maloney’s case resulted from Maloney’s ploy to evade criminal liability by threatening to reveal classified information during the course of his trial in a failed attempt to force the government to dismiss the case. But as Maloney discovered, the government will not be bullied or threatened by a criminal defendant.”

Sentencing for all three defendants will be scheduled at a later date.