A former chief scientist for the Georgia Tech Research Institute was sentenced to five years and 10 months in prison and must pay more than $1.9 million in restitution for conspiring to defraud the school and the CIA, federal prosecutors said Wednesday.
Authorities said James G. Maloney, 58, of Marietta pleaded guilty in May to conspiracy to commit mail and wire fraud.
The case stems from a scheme that dates to 2007, when Maloney and two co-conspirators — James J. Acree, 58, of Atlanta and James D. Fraley, III, 45, of Canton — were working at the research institute on projects funded in part by the U.S. Department of Defense and intelligence agencies.
The three charged about $200,000 in “frivolous personal expenses” on Fraley’s purchasing card issued by Georgia Tech, the U.S. Attorney’s Office for the Northern District of Georgia said in a news release.
Maloney and Fraley also used the card to remodel and maintain six rental properties they co-owned. Authorities said some of the fraudulent card charges were then charged to a classified, CIA-funded research institute contract.
Authorities previously said the card was used to buy four-wheelers, televisions, iPads, digital cameras, sunglasses, solar panels for a private hunting club and other personal expenses.
Georgia Tech found suspicious charges on the purchasing card in 2013 during the course of an audit. That’s when authorities said Maloney suggested to the other two men that they get their “story straight.” Fraley feared he would be blamed, recorded their meetings and gave the recording to the FBI, authorities said.
Acree and Fraley pleaded guilty in 2016 and cooperated with the government.
Acree was sentenced to serve three years on probation, with the first year on home confinement. He must pay more than $604,000 in restitution.
Fraley also was sentenced to three years on probation, with the first eight months on home confinement, and ordered to pay nearly $477,000.
Maloney’s prison sentence is to be followed by three years of supervised release, authorities said.
“Maloney, who was trusted to work on classified contracts for the U.S. government, took advantage of his high position at GTRI to line his own pockets at the public’s expense,” said U.S. Attorney Ryan K. Buchanan, in a written statement.
Georgia Tech said in a statement it appreciates the work of the U.S. Department of Justice and others on the case.
“This case was a collaborative effort and is an example of how committed we are to stopping any wrongdoing that may be taking place within our community. We are glad it has concluded and we can get it behind us. We are appreciative of any efforts that can help us continue building on our culture of strong ethics and responsible stewardship of resources,” the statement said.
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