Jeffrey E. Neely, the former General Services Administration senior executive at the center of the agency’s Las Vegas conference scandal, faces criminal charges after a federal grand jury indicted him on five counts of fraud Thursday.
Prosecutors from the U.S. attorney’s office for the Northern District of California said Neely, for many years the agency’s top executive for the western region, charged the government for personal travel for him — and in one case, his wife — then lied about it to investigators.
Two of the counts accuse him of overstaying a work trip to the Las Vegas hotel where the 2010 Western Regions conference was to be held during one of numerous scouting trips that came under scrutiny. Two charges say Neely and his wife stayed in a hotel in Long Beach, Calif., on a personal trip but charged the government. The fifth says he billed the government for airfare for personal travel between Guam and Saipan in 2012.
The indictment alleges that Neely, 59, of Gardnerville, Nev., also lied when GSA employees questioned him about the spending, saying it was for government business. Neely did not respond to a request for comment.
If convicted, he faces up to five years in prison and a fine of $250,000 for each violation.
Details of lavish Las Vegas conference, which surfaced with a 2012 inspector general’s review that found Neely had organized an $800,000 junket for 300 employees, became a symbol of government excess in a time when Republicans and Democrats on Capitol Hill were calling for less spending. The Washington Post first reported on the watchdog’s findings.
The scandal forced the resignation of GSA chief Martha Johnson, two of her top deputies and several other senior executives. It brought to light the hundreds of millions of dollars the government spends on travel and conferences every year, much of it legitimate, some of it wasteful. Videos of Neely in a hot tub outraged the public.
The revelations led to numerous congressional hearings and prompted the Obama administration to drastically pare back conference spending and travel for government employees, a change that has led to frustration for some in federal offices. They say important training, networking and career development has been stymied.
Others, however, believed the GSA, the government’s real estate manager and chief acquisition agency, had gone too far in a mission to do business more like the corporate entities it did business with.
In 2012 President Obama appointed Dan Tangherlini, a respected official with a track record for good government, to clean up the agency. Tangherlini reined in what had been a decentralized culture with limited oversight. He has touted the government’s success in reducing federal travel and conference spending.
Neely had planned for the 2010 employee conference to be “over the top,” as he told colleagues in e-mails. Conference events included a magician and a $75,000 bicycle-building exercise. There were also questionable contracting practices.
GSA placed Neely on administrative leave in April 2012. He was forced to retire the following month.
Neely did not respond to a request for comment.
Neely invoked the Fifth Amendment when called to testify before a House oversight committee in April 2012. He also failed to appear at hearing the next day with the House Transportation and Infrastructure Committee.
He is scheduled to make his first court appearance on Oct. 20.
Two senior executives who were forced out with Neely successfully challenged their ouster, Paul Prouty, a career civil servant in charge of public buildings in GSA’s Rocky Mountain region, and James Weller, a retired Army colonel who was in charge of federal buildings for GSA’s Southwest region, won their cases before the Merit Systems Protection Board, which found that they were not involved in planning or executing the conference. The board ordered GSA to reinstate them. The agency is appealing the rulings.
Former GSA Inspector General Brian D. Miller, whose report uncovered the Las Vegas scandal, said in response to Thursday’s indictment that high-level officials should not abuse the trust and discretion they are given.
“Senior executives set an example for everyone in an agency,” Miller said. “If they are cutting corners, fudging facts, or cheating even in small things, it sends a message that it’s okay to for everyone to do these things.
* Joe Davidson and Lisa Rein contributed to this article.