Former High Tech Manhattan Executive Pleads Guilty

By: Office of U.S. Attorney Barry Grissom posted by Amanda Lanum Email
By: Office of U.S. Attorney Barry Grissom posted by Amanda Lanum Email

TOPEKA, Kan. -- A former executive of a high tech company in Manhattan, Kan., has pleaded guilty to wire fraud, U.S. Attorney Barry Grissom said Friday.

Aaron Madison, 42, former chief operating officer of NanoScale Corporation, pleaded guilty to one count of wire fraud. NanoScale is a privately held company that contracted to perform work for the U.S. Department of Defense and the U.S. Department of Health and Human Services. Together, those contracts accounted for approximately 90 percent of NanoScale’s business.

In his plea, Madison admitted that he committed the crime at a time when NanoScale was in financial distress. At times, NanoScale’s accounts payable exceeded cash flow and the comp y was having difficulty meeting payroll. From January 2009 to April 25, 2011, Madison attempted to meet NanoScale’s ca flow requirements and keep the company in business by defrauding the U.S. government. He created false invoices and used cash from government contracts to meet the company’s expenses including monthly payroll. He caused interstate electronic transfer of false invoices to the Department of Defense and the Department of Health and Human Services.

Sentencing is set for Nov. 13. He faces a maximum penalty 20 years in federal prison and a fine up to $250,000.

Grissom commended the Department of Defense, Office of Inspector General, Assistant U.S. Attorney Christine Kenney and Assistant U.S. Attorney Rich Hathaway for their work on the case.

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