USC discontinued the manufacturing assistance program last year and fired 62-year-old Gail Shurling, according to a statement the school released in response to Shurling’s guilty plea. She faces up to 20 years in prison when she’s sentenced at a later date, but likely faces less time after reaching the plea.
“Public corruption is not limited to elected officials, it extends to anyone who misuses the public’s money or abuses the public’s trust,” U.S. Attorney for South Carolina Bill Nettles said shortly after a federal judge accepted the plea.
Federal prosecutors said Shurling submitted phony documents to obtain $336,000 in federal grant money that she then used to award contracts and make payments to shell corporations controlled by family and friends for work that was not done.
The CMAT received funding from the South Carolina Manufacturing Extension Partnership to purportedly help businesses with executive leadership development, engineering services and product testing, business consulting and export programs.
Court records claim Shurling would have friends and family members submit bids on various CMAT contracts in the name of various companies. Shurling would then award the contracts to those shell corporations and later approve payments for work that was never completed. The guilty plead stated Shurling would then create fraudulent in-kind letters from those fake companies documenting work that was not performed.
“Ms. Shurling knowingly violated university policy on dishonest acts and fraud; and, skillfully manipulated oversight systems and procedures,” USC spokesman Wes Hickman said in the statement.
The FBI began investigating CMAT after a U.S. Commerce Department inspector general’s report flagged $3.4 million in questionable expenditures by the SC Manufacturing Extension Partnership, according to a 2009 McClatchy Newspapers report. The audit claimed South Carolina’s group could not properly support how it had spent the grants. The agency tried to recoup $1.1 million of that money. Investigators were able to link at least $336,000 of directly to Shurling.
Shurling faces up to 20 years in prison and a $200,000 fine when she is sentenced at a later date, plus restitution to be set by the judge.