Kevin M. Gregory has pleaded guilty to conspiring with his ex-wife and former Georgia Vocational Rehabilitation Agency counselor Karen C. Lyke to falsify educational records and fake students with nonexistents as part of their demanding, multi-year degree Disabilities and diseases create plan to steal more than $ 1.3 million.
“Gregory and Lyke took advantage of a government program designed to enable some of the most vulnerable Americans to meet their educational and career goals,” said US Attorney Ryan K. Buchanan. “Fueled by greed, Gregory and Lyke falsified medical, school and financial records to fabricate bogus students with nonexistent disabilities, leading to an elaborate conspiracy that defrauded taxpayers of more than $1.3 million.”
“Gregory and Lyke have purposefully stolen money for some of society’s most vulnerable. Their greedy actions impact every taxpayer as well,” said Keri Farley, the FBI Atlanta Special Agent in Charge. “The FBI will continue to work tirelessly with our law enforcement partners to bring those who steal taxpayers’ money to justice.”
“Theft of government funds is a serious crime that deprives our most vulnerable citizens of vital assistance,” said State Inspector General Scott McAfee. “OIG will continue to uphold the integrity of government programs and ensure taxpayers’ money is used for its intended purpose.”
“The Georgia Vocational Rehabilitation Agency is committed to protecting the interests of Georgian taxpayers and our constituents. As such, we notified the Georgia Office of Inspector General as soon as we suspected fraud in this matter. We continue to implement and refine protocols to prevent and detect such fraud even earlier to ensure both our customers and public funds are safe,” said GVRA Executive Director Chris Wells.
According to U.S. Attorney Buchanan, the counts and other information presented in court: The State Vocational Rehabilitation Services Program is a federally funded program administered by the U.S. Department of Education that provides grants to assist states in providing services to people with disabilities support. To be eligible for the program, individuals must have a physical or mental impairment that results in a significant disability for employment and require services to achieve employment and maximize their career goals. Across the country, state vocational rehabilitation agencies provide a variety of services for people with disabilities, including student grants for vocational training and college education.
The Georgia Vocational Rehabilitation Agency (“GVRA”) operates the Georgia Vocational Rehabilitation Program. Between 2017 and 2020, the GVRA received at least $100,000,000 in federal funding annually. GVRA’s Vocational Rehabilitation Program has helped people with disabilities (known as “clients”) to find and retain employment, including by providing funding and tuition assistance for college education.
During this time, the GVRA engaged consultants to provide support to its clients, including assisting clients in obtaining instructional support. In order to receive tuition assistance, a client was required to provide GVRA with documentation supporting receipt of GVRA funds, including: (a) medical records showing a disability related to employment, (b) a driver’s license, (c) proof of enrollment in classes, and (d) financial aid information. Upon receipt of the information, the client’s GVRA advisor reviewed the paperwork and mailed the client a check for the requested educational expenses if the advisor approved the student aid application. From June 2015 to March 2019, Karen C. Lyke served as a GVRA consultant in her Norcross, Georgia office. During the conspiracy, Lyke and Gregory were married.
From approximately May 2016 to November 2020, Gregory and Lyke conspired to steal money from the GVRA by demanding educational spending on approximately 13 fake students. Gregory and Lyke used the names of real friends and relatives (including Gregory’s own names) as the names of the fake disabled students who applied to the GVRA for tuition assistance.
Gregory and Lyke used the names of friends and relatives to falsify medical records to make it appear that the 13 or so falsified students were eligible for GVRA student grants. Gregory and Lyke claimed that these bogus students suffered from disabilities or illnesses such as AIDS, cancer, mental health disorders, or muscular dystrophy.
As proof of identity, Gregory and Lyke provided GVRA with fabricated images of fake driver’s licenses that included the names of their friends and relatives. In one instance, Gregory created a fake driver’s license in his cousin’s name by using a mug shot of an unknown person found on the internet as the driver’s license photo.
Gregory and Lyke then used photo editing software to alter authentic college transcripts, financial aid reports, and registration credentials from actual GVRA clients to support claims that the fake students attended schools such as the Georgia Institute of Technology, Georgia State University, or the University of Georgia. Lyke then uploaded the fake driver’s licenses, transcripts, financial aid reports and other documents to GVRA’s electronic database.
Based on false records, Gregory and Lyke arranged for more than 230 checks to be mailed to approximately 13 friends and relatives for claimed educational expenses. In fact, none of the 13 bogus students attended any of the alleged colleges or universities.
GVRA mailed the checks to PO Boxes, which Gregory and Lyke opened on their own behalf. After receiving the GVRA checks, Gregory and Lyke either deposited the GVRA checks into their own bank accounts or gave the GVRA checks to their friends and family for deposit. The friends and relatives returned most of the GVRA funds to Gregory and Lyke after depositing the GVRA checks.
After Lyke left the GVRA in March 2019, Gregory and Lyke continued to submit falsified paperwork to the GVRA for non-existent educational expenses. Because of the false entries, the GVRA issued the fake students checks for fake educational expenses. Gregory and Lyke used the stolen GVRA funds to pay for various personal expenses, including cars, jewelry, high-end guitars, and the down payment on a new home. In all, based on the false paperwork they created, the GVRA mailed more than 230 checks to Gregory and Lyke, resulting in about $1.3 million theft.
From around August 2016 to February 2019, Gregory and Lyke also conspired to steal several high-value computers from the GVRA. Lyke and Gregory, using their position as GVRA consultants, stole several computers by providing the GVRA with falsified documents claiming the following:
- Three actual GVRA customers needed computers to further their educational goals, although in fact the GVRA customers were unaware that Lyke had ordered the computers under their name and never received the computers;
- Three fake students (created by Gregory and Lyke) needed the computers to achieve their educational goals; and
- Gregory was a GVRA customer who needed a computer to help them achieve their educational goals.
Gregory and Lyke have arranged for at least six computers to be sent to the GVRA office in Norcross for Lyke’s attention. Upon delivery, Lyke stole the computers and computer supplies from the GVRA. Gregory and Lyke then sold at least five of the computers on eBay using Gregory’s account. Gregory and Lyke kept a computer for personal use. In total, Gregory and Lyke stole at least seven computers with various accessories valued at approximately $32,000.
Based on this behavior, US Attorney Kevin M. Gregory, 40, of Toledo, Ohio, charged in a criminal complaint with conspiracy to commit federal program theft in a case. Gregory pleaded guilty to those charges before US District Judge JP Boulee.
On September 1, 2022, Karen C. Lyke, 37, of Toledo, Ohio, also pleaded guilty to charges of conspiracy to steal federal programs.
The Federal Bureau of Investigation and the Georgia Office of Inspector General are investigating the case. The Georgia Vocational Rehabilitation Agency also provided valuable investigative assistance.
Assistant US Attorneys Jeffrey W. Davis and Jesika W. French are prosecuting the case.
For more information, please contact the Public Affairs Office of the US Attorney’s Office at [email protected] or (404) 581-6016. The web address of the US Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
