Second Suspect in Alleged Fraud Crime Ring Arrested

Lionel Montel Elder of Atlanta turned himself in at the Cobb County Adult Detention Center, where he was booked on a charge of conspiracy to defraud the state.

After the arrest of Mableton's Gerald Donaldson, the second of six suspects accused of stealing nearly $1-million from Kennesaw State University surrendered Friday night to Cobb authorities.

Lionel Montel Elder of Atlanta turned himself in at the Cobb County Adult Detention Center, where he was booked on a charge of conspiracy to defraud the state, said Nancy Bodiford, the spokeswoman for the Cobb County Sheriff's Office.

Elder's surrender came just one day after the Georgia Bureau of Investigation and the Kennesaw State Police Department arrested Gerald Donaldson, the university's former executive director of environmental health and safety, at his Mableton home.

Between June 1, 2002 and July 1, 2012, the men allegedly arranged payments from Kennesaw State to shell companies that never performed environmental work at the university or performed the work at a price that was intentionally overpriced so that a kickback payment could be made to Donaldson, records show.

The companies were owned by alleged members of the crime ring, identified in warrants as Don Ameche Thomas, Ramon Langford Morgan and others. The companies included Shane Environmental, Orion Environmental, Holbridge Environmental and Jay Mills Environmental.

In Cobb County criminal warrants, authorities allege that "an overt act was committed by (Donaldson), Don Thomas and Ramon Morgan and others in that more than $750,000 in payments was made by KSU and paid to said shell companies for work that was not performed."

Elder, records show, assisted "in arranging payments in the amount of more than $221,050."

The case, which was eventually referred to the Georgia Attorney General's Office, started when Kennesaw State employees reported to university officials their concerns about unusual invoices submitted for payment. The invoices normally had been reviewed by Donaldson, an employee of Kennesaw State since February 2001.

He was terminated on Oct. 5, 2012 after a university audit revealed the fraud, which extended beyond Kennesaw State to include private organizations and additional individuals outside of the university system.

Donaldson allegedly was responsible for approving the fraudulent contracts and for verifying that the work was completed as specified, Kennesaw State said in a statement on Thursday.

He remains in the Cobb County Jail on a $750,000 bond. Elder was released Saturday on a $125,000 bond, according to online jail records.

The four remaining suspects—Morgan, Thomas, Joseph Eto and Julius Babatunde Ogunshola—are not in custody. However, their warrants are still active, Bodiford said.

Like Donaldson and Elder, Eto, Morgan, Ogunshola and Thomas each face a charge of conspiracy to defraud the state. Kennesaw State is a subdivision of the state.

While Eto is accused of accepting more than $201,888 in payments, Ogunshola is accused of accepting more than $67,538 in payments.

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