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Former Tech Chief Pleads Guilty to Defrauding Georgia Tech and CIA
ATLANTA, Georgia – James G. Maloney, the former Chief Scientist for the Georgia Tech Research Institute (GTRI), has pleaded guilty to conspiring to defraud Georgia Tech and the Central Intelligence Agency (CIA).
Maloney’s conspirators, James J. Acree and James D. Fraley, III, 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.’
‘Maloney’s guilty plea should send a clear message to anyone seeking to abuse their positions for personal gain, the FBI will find you and hold you accountable’, said Keri Farley, Special Agent in Charge of FBI Atlanta. ‘Thanks to our extraordinary partnership with Georgia Tech, even with Maloney’s defense tactics he was unable to avoid the consequences of his crimes. He will now be sentenced with his coconspirators, closing out this lengthy case.’
According to U.S. Attorney Buchanan, the charges, and other information presented in court, from early 2007 through late 2013, Maloney, Acree, and Fraley engaged in a scheme to defraud Georgia Tech and the CIA. They are experts in electromagnetic analysis and measurements and were assigned to GTRI’s Advanced Concepts Laboratory (ACL), where they worked on projects funded by the United States Department of Defense, various intelligence agencies, and private industry.
PCard Fraud: As part of his duties and responsibilities at GTRI, Fraley had access to a Georgia Tech credit card known as a ‘PCard.’ Fraley was supposed to use his PCard only to purchase materials and supplies for official Georgia Tech business. Neither Fraley nor anyone else was allowed to charge personal expenses on a PCard.
Maloney, Acree, and Fraley falsely led GTRI to believe that all of their PCard charges were for official business. In fact, Maloney, Acree, and Fraley charged approximately $200,000 in personal expenses on Fraley’s PCard, including two four-wheelers and a trailer, two Sony 52-inch flat-screen televisions, Apple computers, iPads, OtterBox protective cases, iPods, Kindle E-readers, Leica and Nikon digital cameras, video cameras, a mini micro pinhole video camcorder pen, a night vision monocular, two pairs of binoculars, Bose headphones, a 3D printer, sports watches with heart-rate monitors, sunglasses, materials used to perform private consulting contracts, computer monitors and solar panels for a private hunting club, a personal video network for home use, and an uninterruptible power supply for a tennis ball machine.
Maloney and Fraley also used Fraley’s PCard to pay for remodeling and maintenance expenses related to six rental properties they owned together in the name of a Georgia corporation called J’s Services, Inc.
Some of the fraudulent PCard charges and some of the remodeling and maintenance expenses for Maloney and Fraley’s rental properties were charged to a classified GTRI contract that was funded by the CIA.
Fraudulent Consulting Activity: In February 2007, Maloney and Acree were reprimanded by GTRI for engaging in outside consulting activity that violated Georgia Tech’s conflict-of-interest policy. Maloney and Acree sent a letter to their supervisor at GTRI, acknowledging that they had used facilities and equipment owned by Georgia Tech for their personal gain and benefit and promising that they would never do it again. But Maloney and Acree continued to engage in outside consulting activity that harmed Georgia Tech, and they were soon joined by Fraley.
Tec-Masters Inc.: From December 2007 through March 2013, while they were employed full-time at GTRI, Maloney and Acree secretly worked for Tec-Masters Inc., a private company that had previously contracted with GTRI. Tec-Masters Inc. paid Maloney and Acree tens of thousands of dollars for their work.
Defendant Information:
Defendant: James G. Maloney
Charges: Conspiring to defraud Georgia Tech and the CIA
City and State: Atlanta, Georgia
Date: From early 2007 through late 2013
Sentence: To be sentenced with coconspirators
Dollar Amount: $200,000 in personal expenses charged on Fraley’s PCard
Key Facts
- State: Georgia
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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