11th Circuit: Georgia Tech Auditor Law Enforcement Role in Criminal Probe

• Former Georgia Tech professor Joy Laskar is suing university auditors Phillip Hurd and Patrick Jenkins, alleging they acted as law enforcement in a racketeering case against him.
• Laskar was charged in 2010 after an internal audit found he allegedly misused university resources for his private company, Sayana Wireless, and failed to disclose conflicts of interest.
• The criminal racketeering case was dismissed in 2014 due to the statute of limitations, and Laskar was subsequently fired by Georgia Tech.
• A U.S. District Court twice dismissed Laskar's civil rights lawsuit against the auditors, finding he failed to show they operated as law enforcement officers.
• The 11th Circuit panel expressed skepticism about Laskar's claims, suggesting the Georgia Bureau of Investigation conducted an independent criminal probe, separate from the auditors' findings.

This stance from the 11th Circuit suggests a high bar for proving that internal auditors acted as law enforcement, particularly when external agencies conduct independent criminal investigations, impacting potential malicious prosecution claims.

A federal appellate court recently heard arguments concerning whether internal auditors at Georgia Tech should be considered law enforcement officials in the context of a criminal investigation that led to racketeering charges against a former professor. Joy Laskar, formerly an engineering professor at the university, brought a civil rights action against two university auditors, Phillip Hurd and Patrick Jenkins, alleging they acted as law enforcement and provided misleading information. The central question before the 11th Circuit is whether these auditors' involvement in a criminal probe, initiated after their internal findings, crossed the line into law enforcement activity, thereby exposing them to liability for malicious prosecution.

Laskar's legal team contended before a three-judge panel that the auditors failed to conduct an impartial investigation into allegations that he misused university resources for his private enterprise, Sayana Wireless. They further argued that Hurd and Jenkins maintained continuous involvement in the criminal investigation after referring their findings to state authorities, actively influencing the direction of the case toward prosecution. This argument seeks to establish a link between the auditors' actions and the subsequent criminal charges, which were ultimately dismissed on procedural grounds.

The origins of the dispute trace back to 2009 when Georgia Tech initiated an investigation into a significant $600,000 financial shortfall at the Georgia Electronic Design Center, a research facility Laskar directed. During their internal audit, Hurd and Jenkins discovered that Sayana, a company co-founded and presided over by Laskar, had billed the design center over $1 million for the production of prototype microchips. These microchips were subsequently sent to a South Korean institute, which compensated for both the prototypes and associated research.

Further audit findings revealed that Laskar had a 42.5% ownership stake in Sayana, a fact he allegedly failed to disclose in conflict-of-interest reports submitted to the university between 2007 and 2010. Additionally, Sayana reportedly did not pay membership fees to utilize the resources of the design center. Following these discoveries of suspected malfeasance, the auditors reported their findings to Georgia Tech, which then forwarded the report to the Georgia Department of Law, setting the stage for a university auditor criminal investigation that would eventually involve external law enforcement.

In 2010, Joy Laskar faced two counts of racketeering based on these allegations. However, a Superior Court judge dismissed the criminal case four years later, ruling that the charges were barred by the statute of limitations, rather than on the merits of innocence. Concurrently, Georgia Tech terminated Laskar's employment, concluding that he had indeed diverted university resources for the benefit of his company. This outcome, while not an acquittal, became a point of contention in subsequent civil litigation.

Laskar subsequently filed a civil rights lawsuit in 2018 against the auditors in the Northern District of Georgia, asserting that they intentionally provided false and misleading information to law enforcement. U.S. District Judge William M. Ray initially dismissed the case, citing Laskar's lack of a "favorable termination" in the criminal proceedings—a prerequisite for maintaining a malicious prosecution claim. Although this initial dismissal was reversed on appeal, Judge Ray again dismissed the case in 2025, determining that Laskar had not sufficiently demonstrated that the auditors functioned as law enforcement officers, a critical element for his claim.

During the recent 11th Circuit hearing, Laskar's attorney, Michael Dailey, reiterated that the auditors were "continuously involved" in the criminal investigation. He highlighted that some evidence seized by law enforcement was stored within the audit department and reviewed by the audit team, and that the lead investigator from the Georgia Bureau of Investigation (GBI) routinely sought information and advice from the auditors. This argument aimed to demonstrate the blurred lines between the Georgia Tech internal audit investigation and the subsequent criminal probe.

However, the appellate panel expressed significant skepticism regarding this characterization. U.S. Chief Circuit Judge William Pryor pointed out that evidence suggested the GBI conducted its own independent investigation and made its own decision to pursue charges. He remarked that any issues with the case would fall to law enforcement, not the auditors. U.S. Circuit Judge Barbara Lagoa further emphasized that prosecutors present cases to grand juries based on their belief in the case's merits, not simply because an auditor instructs them to do so. This stance from the 11th Circuit suggests a high bar for proving that internal auditors acted as law enforcement, particularly when external agencies conduct independent criminal investigations, impacting potential malicious prosecution claims.

Lawyers advising universities or corporations on internal investigations should note the 11th Circuit's skepticism regarding blurring the lines between internal auditors and law enforcement. This case suggests a high bar for proving auditors acted as law enforcement for civil rights claims, particularly when external agencies conduct independent criminal investigations, impacting potential malicious prosecution claims.

Source: Original reporting via Courthouse News Service