Three former Georgia Tech employees were charged with committing and conspiring to commit mail and wire fraud, the Department of Justice said.
James G. Maloney, James J. Acree and James D. Fraley were all charged in connection with fraudulent use of a Procurement Card (P-card) and fraudulent consulting activity, U.S. Attorney John A. Horn said.
“The defendants in this case were successful members of the scientific and research communities who allegedly allowed their judgment to be clouded by greed,” Horn said.
Fraley, 38, of Acworth served as the senior research technologist at Georgia Tech until October 2013. In December of that year, he was one of three employees to be investigated by the FBI concerning $1.5 million of questionable P-card spending. Fraley had access to a Georgia Tech P-card, Horn said, which was supposed to be used strictly to buy supplies and materials for business purposes.
According to Horn, Maloney, 50, Acree, 50, and Fraley allegedly made more than $250,000 worth of personal charges. Horn said the men allegedly bought two four-wheelers and a trailer, two Sony 52-inch flat-screen televisions, Apple products including computers, iPads and iPods, Kindle E-readers, cameras, a mini micro pinhole video camcorder pen, a night vision monocular, two pairs of binoculars, Bose headphones, a 3-D printer, sports watches with heart-rate monitors, sunglasses, solar panels for a private hunting club and “an uninterruptible power supply for a tennis ball machine.”
Maloney and Fraley also allegedly used the P-card to pay for remodeling and maintenance expenses at multiple rental properties, Horn said. Documents filed in court showed expenses related to six rental properties they owned together in the name of a Georgia corporation called J’s Services.
Acree and Maloney served as the Georgia Tech Research Institute’s program manager and principal research engineer, respectively.
While employed full-time by Georgia Tech, Maloney, Acree and Fraley allegedly moonlighted as consultants on various projects for which they were paid a total of more than $600,000, Horn said. Maloney and Fraley allegedly recruited some Georgia Tech employees and students to help with their consulting work.
“In competing for and performing this outside consulting work, the defendants allegedly diverted customers and revenue away from GTRI for their own personal gain and benefit,” Horn said.
Fraley also allegedly used the P-card to make PayPal payments to friends and relatives who “kicked back” some of the money to him, Horn said.
In order to make the charges look legitimate, officials said, the three men used fake invoices and altered documents.
When the men discovered they were being investigated, they met to talk over the fraud and “get their stories straight,” Horn said. The three allegedly conspired to cover up the fraud.
Fraley recorded these conversations on his phone and later turned the recordings over to the FBI, Horn said.
“The allegations contained in the charging federal indictment are disheartening in that these three defendants offered so much to a technical program that very much needed their skills and intellect. The allegations, however, assert that they chose instead to engage in fraud driven by financial greed,” J. Britt Johnson of the FBI said.
Fraley and Acree appeared before Judge Janet F. King, where they waived indictment and said they intend to plead guilty. Maloney was indicted June 28.
