On March 26, 2001, Walter Frost, a former NASA Research Contractor, and a
former professor of engineering at the University of Tennessee Space
Institute (UTSI), Tullahoma, TN, was sentenced to 4 months home detention and
24 months supervised probation. Frost was fined $10,000, ordered to pay
$2,322 restitution and a $1,000 special assessment fee.

Peggy Potter, a former NASA employee was sentenced to 4 months home detention
and 24 months supervised probation. Potter was fined $2,000 and ordered to
pay a $100 assessment fee.

On April 28, 1995, Frost was convicted on 28 counts of mail fraud and Potter
was convicted on 6 counts of mail fraud relating to a “degree for contracts”
scheme. The indictment charged that Frost exploited his position at UTSI to
grant academic favors or benefits to Potter and three other individuals named
in the indictment in exchange for preferential treatment on NASA contracts.
Frost allowed Potter and others to use research studies prepared by his
private firm as all or parts of their dissertation or thesis for masters and
doctorate degrees in scientific disciplines. Frost owned a private
consulting firm that performed research services for various Government
agencies.

NASA employed Potter as Manager of the Small Business Innovation Research
program while she was a student of Frost at UTSI in the Masters program. The
primary purpose of the scheme was to enable Frost to obtain improper
influence over Government employees who were enrolled in the academic program
at UTSI. These employees by virtue of their positions within NASA were in a
position to recommend contract awards be awarded to Frost.

The sentences were rendered after a lengthy appeals process in excess of 5
years.

Special Agents of the NASA Office of Inspector General, Office of Criminal
Investigations, the Federal Bureau of Investigation, and the U.S. Army
Criminal Investigation Division, conducted the investigation. The
prosecution was handled by the United States Attorney’s Office, Eastern
District of Tennessee, Chattanooga, TN, (432) 752-5140.

For more information on this release, please call Samuel Maxey, Assistant
Inspector General for Investigations at (202) 358-2580.