Earl Mahfuz, the former state Department of Transportation treasurer during DOT’s accounting scandals, will not face prosecution.
In a letter to Gov. Nathan Deal Friday, state Attorney General Sam Olens wrote that an allegation of possible "financial statement fraud" at DOT was not a Georgia crime, and the case against him was weak.
"While I certainly do not condone the conduct of Mr. Mahfuz ... I simply cannot proceed with a criminal prosecution that will in all likelihood fail," Olens wrote.
In July 2009, after brutal state auditor's and inspector general's reports, former Gov. Sonny Perdue assailed what he called DOT's "Enron-like accounting" and urged then-Attorney General Thurbert Baker to "take appropriate action." Mahfuz’s allies maintained the investigation against him was politically motivated.
Olens noted three DOT employees made credible claims that Mahfuz ordered them to stop entering contracts into the accounting system near the end of the 2008 fiscal year. That had the effect of postponing $153 million of the contract entries into the next fiscal year, making DOT's financial situation for 2008 look better than it was, the reports said.
The DOT's board demoted Mahfuz to assistant treasurer in 2008, then made him director of the agency's multibillion-dollar toll program. He retired last year and has appeared occasionally at DOT board meetings as a consultant.
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