Danville software executives accused of trying to defraud Tennessee Valley Authority

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Top executives at a Danville-based software company were charged this month by federal prosecutors with allegedly trying to acquire more than $300,000 in fraudulent incentive payments from the Tennessee Valley Authority (TVA) related to contract work for a school district outside of Nashville.

Anthony “Tony” Gigliotti, 74, the CEO of Autonomic Software, Inc., faces one count of conspiracy to commit wire fraud, three counts of mail fraud and three counts of wire fraud while Autonomic vice president Alexander Gigliotti, 36, is charged with conspiracy to commit wire fraud.

Both men were arrested by the U.S. Marshals Service in Danville on Sept. 10, according to the U.S Attorney’s Office for the Middle District of Tennessee.

They were subsequently released from custody, and they are scheduled for video arraignment this Wednesday morning where they are expected to enter a plea to the charges.

Defense attorney Lawrence Arnkoff did not respond to a request for comment about the Gigliottis’ case as of Tuesday evening.

According to prosecutors, the case originated in the wake of contracted work Autonomic did in 2016 in installing power management software for Rutherford County Schools, a school district based in Murfreesboro, Tenn., southeast of Nashville.

The work was in connection with the TVA’s EnergyRight effort, “an incentive-based program designed to save energy and reduce costs through the installation of energy-saving software. To be eligible for the energy conservation funds, customers were required to pay a portion of the software materials costs,” prosecutors said.

Investigators allege Autonomic personnel falsely represented to the district that schools would not incur any costs associated with the software installation. But after installing the software, the company allegedly submitted 47 invoices worth $588,240 to Lockheed Martin — the contract administrator for EnergyRight — that were made out to Rutherford County Schools for costs incurred by each school for Autonomic work.

Prosecutors allege Alexander Gigliotti emailed Lockheed Martin with a breakdown of an invoice that claimed a school paid $22 per computer related to software and $8 per computer for support.

“In fact, Rutherford County Schools did not incur any costs associated with any invoice from Autonomic,” authorities said. “Lockheed Martin then mailed incentive payments to Autonomic that corresponded to each invoice.”

The indictment against the pair also alleges that Tony Gigliotti lied to TVA agents by falsely claiming Alexander Gigliotti was not involved in any previous TVA or Rutherford County work.

To boot, “The Autonomic software failed to function as initially represented and approximately one year after the installation, Rutherford County Schools purchased energy saving software that could effectively quantify energy savings and which cost substantially less than Autonomic’s total purported materials costs,” prosecutors allege.

The defendants face up to 20 years in prison if convicted of the allegation. The investigation was led by the TVA’s Office of Inspector General, and the case is being prosecuted by assistant U.S. attorney Sara Beth Myers.