Ex-husband of former state employee admits guilt in fraud scheme

The ex-husband of former Georgia Vocational Rehabilitation Agency counselor Karen C. Lyke has pleaded guilty to conspiring with her in a multiyear scheme to steal more than $1.3 million. Kevin M. Gregory, 40, of Toledo, Ohio, pleaded guilty before U.S. District Judge J.P. Boulee to one count of conspiracy to commit federal program theft. Gregory and Lyke, 37, who pleaded guilty last month, admitted forging educational records by creating fake students with non-existent disabilities and illnesses to obtain tuition assistance from the state agency. The pair used the names of friends and relatives to fake medical records to create the appearance that 13 fake students qualified for the grant funds. They claimed the fake students suffered from disabilities or illnesses including AIDS, cancer, psychosocial impairments, or muscular dystrophy. “Gregory and Lyke exploited a government program designed to empower some of the most vulnerable Americans to achieve their educational and vocational goals,” U.S. Attorney Ryan Buchanan said. “Driven by greed, Gregory and Lyke … swindled taxpayers out of more than $1.3 million.” Lyke served as a GVRA counselor in the agency’s Norcross office from June 2015 until March 2019.

Based on false documentation, the two caused more than 230 checks to be mailed to the fake students. Gregory and Lyke either deposited the checks into their own bank accounts or gave them to the fake students to be deposited.

The fake students then funneled most of the funds back to Gregory and Lyke.

Gregory and Lyke used the stolen funds to pay for various personal expenses, including cars, jewelry, high-end guitars, and the down payment on a new home.

The two also conspired to steal at least seven computers valued at about $32,000. They kept one for personal use and sold the rest.

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