A Cobb County grand jury charged a former Kennesaw State University employee and his associates with racketeering for allegedly obtaining more than $686,000 through fraudulent billing, the state attorney general said Thursday.
Gerald Donaldson, 46, was charged with two counts of racketeering, and his associates Joseph Eto, Ramon Morgan, Don Thomas and Lionel Elder were each charged with one count of racketeering, Attorney General Sam Olens’ office said in an emailed release.
Between August 2002 and October 2012, Donaldson was employed as the director of the environmental health and safety department at KSU, where he had the authority to pay vendors without a bidding process and without additional approval for amounts less than $5,000, according to investigators. He was terminated from the university in October 2012.
Through his position at KSU, Donaldson allegedly funneled money to himself and others by directing KSU to pay vendors at an extreme mark-up or for work that was never done by the vendor. The vendor, who owned a company called Shane Environmental, would then make payments to Donaldson, Olens’ office said. KSU paid Shane more than $354,000 for work purportedly done on campus during the 10-year period.
During that time, Elder worked as the operations coordinator for Donaldson and was allegedly involved in the scheme.
Another alleged co-conspirator, Eto, owned and operated Soil and Environmental Testing Service (SETS), a legitimate business and vendor to KSU. Eto billed KSU unreasonable fees for work done by SETS, according to investigators. More than $61,000 of the money KSU paid to SETS was later transmitted back to Shane Environmental.
Eto and Donaldson also allegedly forged four re-inspection forms by listing the name and accreditation number for an accredited inspector who had not actually done the inspection in question, the attorney general said.
Morgan, another alleged conspirator and a childhood friend of Donaldson, owned Jay Mills, a Detroit-based company that had never done work for KSU, Olens said. Donaldson allegedly directed KSU to pay Jay Mills more than $221,000 for alleged contract work, and more than $198,000 of that money was funneled back to Shane Environmental, according to investigators.
Donaldson also hired his neighbor, Don Thomas, to do odd jobs at KSU in exchange for Thomas opening businesses called Orion Consulting and Holbridge Environmental Services, Olens said. Donaldson then allegedly created phony invoices with inflated amounts due to Orion and Holbridge. Donaldson directed KSU to pay these companies $56,709, of which $49,546.50 was paid back to Shane, investigators said.
If the suspects are convicted, racketeering carries a penalty of five to 20 years in prison, a fine or both, Olens’ office said.
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