Georgia Department of Law, from the office of Samuel S. Olens, Attorney General


Former Kennesaw State Department Head and Associates Charged with Kickback Scheme

July 17, 2014

Last week, a Cobb County Grand Jury charged former Kennesaw State University (KSU) employee Gerald Donaldson and his associates Joseph Eto, Ramon Morgan, Don Thomas and Lionel Elder with one count of Racketeering (O.C.G.A. § 16-14-4(a)). Donaldson was charged with one additional count of Racketeering. Donaldson, Elder, Eto, Morgan, and Thomas obtained over $686,000 through the fraudulent billing of KSU.

Between August 2002 and October 2012, Gerald 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 $5000.

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 Environmental. Mr. Eto and Mr. Donaldson also forged four re-inspection forms by listing the name and accreditation number for an accredited inspector who had not actually done the inspection in question.

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 Environmental.

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. 

Racketeering carries a penalty of five to 20 years in prison, a fine, or both.

Assistant Attorney General Laura D. Pfister is prosecuting 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. The indictment was returned on July 10, 2014.