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Former state employee sentenced in fraud scheme


  • By The Newnan Times-Herald
  • |
  • Dec. 02, 2022 - 7:57 PM

Former state employee sentenced in fraud scheme

The Newnan Times-Herald

ATLANTA – A former Georgia Vocational Rehabilitation Agency (GVRA) counselor has been sentenced to five years in prison for creating fake students with non-existent disabilities and illnesses in a scheme to steal more than $1.3 million.

Karen C. Lyke and ex-husband Kevin M. Gregory used the names of friends and relatives to create fake medical records to make it appear that 13 fake students qualified for tuition assistance from the GVRA. They claimed these fake students suffered from disabilities or illnesses including AIDS, cancer, psychosocial impairments, or muscular dystrophy.

Lyke and Gregory then used photo-editing software to alter authentic college transcripts, financial aid reports, and proofs of registration from actual GVRA clients to support claims that the fake students attended schools including Georgia Tech, Georgia State University, or the University of Georgia.

Based on the false documentation, Lyke and Gregory caused more than 230 checks to be mailed to the 13 friends and relatives for bogus educational expenses. In fact, none of the 13 attended any of the claimed colleges or universities.

Lyke and Gregory 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.

“The state of Georgia trusted Lyke to serve some of its most vulnerable citizens – Georgians with significant disabilities and illnesses,” U.S. Attorney Ryan K. Buchanan said Thursday. “Driven by greed more than integrity, Lyke betrayed that trust and masterminded a complex scheme to invent fake students with non-existent disabilities. … Based on her sophisticated conspiracy, Lyke cheated taxpayers out of more than $1.3 million.”

“Lyke abused her trusted counselor position to line her own pockets, and for that she will spend time in prison,” added Keri Farley, special agent in charge of the FBI’s Atlanta office. “This sentencing should serve as a message that the FBI and our partners will not tolerate anyone driven by personal greed to steal American taxpayer money that should be going to those who need it.”

Lyke served as a GVRA counselor in the agency’s Norcross office from 2015 until 2019. After she left the agency, she and Gregory continued to submit forged paperwork to the GVRA for non-existent educational expenses.

The pair also conspired to steal at least seven high-value computers worth about $32,000 from the GVRA. They kept one for personal use and sold at least five on eBay.

Lyke pleaded guilty in October to conspiring to commit federal program theft. Her five-year prison sentence will be followed by three years of supervised release. She also was ordered to pay the stolen money back to the U.S. Department of Education and the GVRA.

Gregory, who also pleaded guilty in October, is scheduled to face sentencing next month.

This story is available through a news partnership with Capitol Beat News Service, a project of the Georgia Press Educational Foundation.