3 former Georgia Tech researchers sentenced after defrauding school, CIA
Three former researchers at the Georgia Institute of Technology were sentenced to time in federal prison and ordered to pay millions back in restitution.
The men were under investigation for defrauding the university for years while working for the Georgia Tech Research Institute. The group cited a fake “classified contract” with the Central Intelligence Agency as a cover-up for what justice officials called “problematic charges.”
It’s a story that Channel 2 Action News has covered for nearly a decade after learning three men were fired for allegedly misspending government funds while working at Georgia Tech.
In 2016, James Maloney, James Acree and James Fraley were indicted for committing and conspiring to commit fraud and participating in the conspiracy, after a university audit found they’d been misusing funds, according to the U.S. Department of Justice.
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Maloney pled guilty in May, admitting to conspiring to defraud Georgia Tech and the CIA, according to USDOJ.
His co-conspirators, Acree and Fraley, entered their own guilty pleas in 2016, USDOJ said.
All three researchers were fired in 2014 after they were investigated by Georgia Tech for violating the university’s policies for business ethics and conflicts of interest.
Justice officials said their work at GTRI was centered on projects funded by the United States Department of Defense, various intelligence agencies, and private industry.
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According to the Justice Department, all three researchers had access to a Georgia Tech credit card, meant to buy supplies for official business.
Instead, Maloney, Acree, and Fraley “falsely led GTRI to believe that all of their PCard charges were for official business. In fact, they charged approximately $200,000 in frivolous personal expenses on Fraley’s PCard.”
When some of the fraudulent expenses were exposed during an audit, Maloney and Fraley told officials they were charged to “a classified GTRI contract funded by the CIA.”
During the auditing process, the three men met, and Maloney “suggested to Acree and Fraley that they meet to get their ‘story straight.’”
In the so-called “cover-up meetings,” Maloney asked his co-conspirators to help him create a fake story to mislead auditors, according to USDOJ.
Officials said the three men were sentenced to the following prison stays and ordered to pay restitution:
James G. Maloney, 58, of Marietta, Georgia, was sentenced to five years, and 10 months in prison to be followed by three years of supervised release and ordered to pay restitution of $1,972,543.61. Maloney was convicted on these charges on May 22, 2023, after he pleaded guilty.
James J. Acree, 58, of Atlanta, Georgia, was sentenced to serve three years on probation, with the first 12 months to be served on home confinement, and ordered to pay restitution of $604,692.56. Acree was convicted on these charges on August 15, 2016, after he pleaded guilty.
James D. Fraley, III, 45, of Canton, Georgia, was sentenced to serve three years on probation, with the first eight months to be served on home confinement, and ordered to pay restitution of $476,960.95. Fraley was convicted on these charges on September 2, 2016, after he pleaded guilty.
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