Woman sentenced to 5 years in theft of $1.3M from state assistance program

A former state employee has been sentenced to five years in federal prison after pleading guilty to orchestrating an elaborate scheme to steal more than $1.3 million from a state tuition assistance program for students with disabilities, the U.S. Department of Justice announced Thursday.

Karen C. Lyke worked as a counselor at the Georgia Vocational Rehabilitation Agency’s Norcross office between 2015 and 2019. Her job was to assist those applying to the state’s Vocational Rehabilitation Services Program, which is a federally funded initiative aimed at helping people with disabilities earn a college education and find and maintain employment.

“The state of Georgia trusted Lyke to serve some of its most vulnerable citizens — Georgians with significant disabilities and illnesses,” U.S. Attorney Ryan Buchanan said in a statement. “Driven by greed more than integrity, Lyke betrayed that trust.”

During that time, federal prosecutors said she and her ex-husband, Kevin M. Gregory, conspired to collect more than 230 checks by creating approximately 13 fake students, sometimes using photo editing software to alter authentic documents required to prove eligibility and a need for assistance.

ExploreWoman accused of stealing $1.3 million from state tuition assistance program

The ex-couple used the stolen money to pay for a variety of things, including cars, jewelry, high-end guitars and a down payment on a new home, according to prosecutors.

“Lyke abused her trusted counselor position to line her own pockets,” Keri Farley of FBI Atlanta said. “The FBI and our partners will not tolerate anyone driven by personal greed to steal American taxpayer money that should be going to those who need it.”

They were charged earlier this year with one count of conspiring to commit federal program theft. By October, both had pleaded guilty.

ExploreEx-couple plead guilty to stealing $1.3M from tuition assistance program

In addition to her five-year prison sentence, Lyke will spend three years on supervised release and was ordered to pay the more than $1.3 million back in restitution to the U.S. Department of Education and the GVRA.

“This sentence provides accountability for an absolutely brazen crime that resulted in the largest criminal fraud OIG has ever investigated,” state Inspector General Scott McAfee said, adding that his office “will continue to uphold the integrity of state programs and ensure taxpayer dollars are used for their intended purpose.”

Gregory is set to be sentenced in January.