Former Kennesaw State University (KSU) employee Gerald Donaldson and his associates Joseph Eto, Ramon Morgan, Don Thomas and Lionel Elder have pleaded guilty in Cobb County Superior Court to offenses relating to their fraudulent billing of KSU for over $686,000.

Between August 2002 and October 2012, Donaldson was employed as the Director of the Environmental Health and Safety department at KSU. In this capacity, he had the authority to pay vendors without a bidding process and without additional KSU approval for amounts less than $5,000.

Through his position at KSU, Donaldson funneled money to himself and others by directing KSU to pay vendors at an extreme mark-up or for work that was never done by the vendor. The vendor would then kickback payments to Donaldson through his company Shane Environmental (Shane). KSU paid Shane more than $354,000 for work purportedly done at KSU over the ten year period.

Joseph Eto owned and operated Soil and Environmental Testing Service (SETS), a legitimate business and vendor to KSU. Eto billed KSU unreasonable fees for work done by SETS. More than $61,000 of the money paid to SETS by KSU was later transmitted back to Shane.

Ramon Morgan, a childhood friend of Donaldson, owned Jay Mills, a Detroit-based company that had never done work for KSU. Donaldson directed KSU to pay Jay Mills more than $221,000 for alleged contract work. More than $198,000 of that money was funneled back to Shane.

Donaldson hired his neighbor, Don Thomas, to do odd jobs at KSU in exchange for Thomas opening businesses called Orion Consulting and Holbridge Environmental Services. Donaldson then created invoices with greatly inflated amounts due to Orion and Holbridge. Donaldson directed KSU to pay these companies $56,709, of which $49,546.50 was paid back to Shane. 

Below are the defendants’ pleas and the sentences handed down by Cobb County Superior Court Judge Stephen Schuster.

• Donaldson pleaded guilty to two counts of Racketeering on November 19, 2014, and was sentenced to three years in prison and 37 years probation. He was ordered to pay $610,264 in restitution.
• Eto pleaded guilty to one count of Racketeering on November 10, 2014, and was sentenced to five years probation. He was ordered to pay $61,446 in restitution.
• Elder pleaded guilty to one misdemeanor count of Theft by Taking on November 18, 2014, and was sentenced under the First Offender Act to 12 months probation.
• Morgan pleaded guilty to one count of Racketeering on September 25, 2014, and was sentenced under the First Offender Act to two years probation. He was ordered to pay $8,092 in restitution.
• Thomas pleaded guilty to one count of Theft by Taking on October 30, 2014, and was sentenced under the First Offender Act to five years probation. He was ordered to pay $7,000 in restitution.

Assistant Attorney General Laura D. Pfister prosecuted the case on behalf of the State of Georgia. The case was investigated by Sergeant Mike Centola of the KSU Police Department, as well as the Georgia Bureau of Investigation.