Audit uncovers suspected fraud at Georgia Tech

by: Richard Belcher Updated:

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ATLANTA - Channel 2 Action News has learned that Georgia Tech auditors have uncovered a suspected scheme involving bogus invoices, altered documents and suspicious companies.

University investigators say purchases with the suspect companies total $1.5 million. Two employees have left the Georgia research institute because of the findings. A third is on leave.

Georgia Tech had an embarrassing run of P-Card fraud cases starting six years ago. One employee was convicted of stealing more than $300,000; another nearly $200,000.

The university tightened controls, but now it faces another case of suspected fraud.

The details of the suspected fraud are laid out in an Oct. 4 report from tech's chief auditor to the head of the research institute, an arm of the university funded exclusively by research grants.

Channel 2 investigative reporter Richard Belcher obtained a copy of the report Thursday afternoon.

Three people are featured in the report: Senior research technologist James Fraley, III, Alan Golivesky, the assistant director of financial operations, and Stephen Blalock, a principal research engineer.

The university said Fraley and Golivesky are no longer at Tech. Blalock is on leave.

The report identifies three companies with total sales to the research institute of roughly $1.5 million and it is critical of all three.

Some of the findings about SRC Cables: The company admits "creating seven dummy invoices to the Georgia Tech research institute," and there is "a high likelihood that invoices are fabricated and materially false."

About Wiesmann Tools: "Multiple purchases greater than $4,000 are unaccounted for, unsupportable for research and factually questionable."

And about Botts Construction Company: "Fraley has a close personal and ongoing relationship with the owner of the company," and "GTRI may be the only customer of this vendor."

In the report, chief auditor Phillip Hurd called the findings egregious violations of university and state policies and state law.

The state Attorney General's Office says it will neither confirm nor deny that the matter is under criminal investigation.



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