The University of Georgia’s farm-raised sturgeon operation started as a point of pride for the Warnell School of Forestry and Natural Resources. But now, Douglas Peterson, the professor behind this sustainable caviar production, may face criminal charges for keeping a share of UGA’s profits.

The Georgia Bureau of Investigation is looking into whether Peterson will be charged with “theft by taking” and “conspiracy to defraud the state,” according to documents filed Oct. 11 in the Superior Court of Athens-Clarke County.

Separation stipulations

On Oct. 31, Peterson was forced to retire from the university after an internal investigation found Peterson violated university policy by adding an extra consulting fee to UGA caviar, which he allegedly pocketed and will have to pay back in full by Sept. 30, 2019.

Based on his estimates to UGA’s Internal Auditing Division on how much he profited, Peterson could end up paying up to $200,000 back to the university.

The Red & Black obtained the IAD report, as well as a separation agreement outlining the terms of Peterson’s forced retirement.

Peterson and his wife Joy are required to return all funds he or any other entity on his behalf received from caviar sales. He is required to pay UGA $85,000 by Jan. 31 and any remaining money owed by September.

“This unfortunate situation arose from a misunderstanding,” Peterson said in an emailed statement to The Red & Black sent by his wife. “I genuinely understood and believed for over seven years that what I did was acceptable and the University always received fair market value for its caviar.”

The agreement also prevents him from suing UGA or the University System of Georgia or applying to work at any USG institution.

It remains to be seen whether or not he will face criminal charges until the investigation by the GBI is completed.

Since coming under investigation, another name will have to take over UGA’s caviar production, who Peterson will have to train to “restore the immediate flow of revenues back to Warnell,” according to his separation agreement with the university.

UGA’s sustainable caviar production garnered statewide attention while headed by Peterson. The Atlanta Journal-Constitution featured his work, as did a 2015 Atlanta magazine article. UGA caviar was being sold in Atlanta-based restaurants such as Empire State South (owned by Hugh Acheson, who also owns Athens’ Five and Ten and The National), Restaurant Eugene and Aria.

An added consulting fee

Peterson sold the caviar to distributors like Inland Seafood through Texas-based Richmont Trading Corporation, with some of the caviar being branded under the university and some being rebranded as Rochon Premium Brands.

When selling to Inland, Richmont would bill Inland $35 per ounce, with $18 going to UGA, a $15 “consulting fee” going to Peterson or to a company called JDP Investments and Consulting and a $2 profit to Richmont. Half of the revenue from UGA’s caviar sales was being funneled elsewhere.

JDP Investments is registered in Florida under the names of Peterson, his wife and her father, though Peterson said in the emailed statement his wife “had nothing to do with any of this and is totally innocent.”

The IAD report noted while it did not have invoices of all transactions, Peterson received at least $65,000 for “consultation services” and “shipping supplies” from Richmont from May 4, 2016 to June 15, 2017.

“I have already resolved the issue with the University in good faith, doing everything they’ve asked of me and I have always given 100 percent of my effort as a professor to the University."

-Doug Peterson, former Warnell professor

In his May 2018 interview with IAD, Peterson recalled speaking with Petrossian, a French company that buys and sells caviar, around 2007-2008. After some initial discussions about setting up a relationship with UGA, the agreement never materialized.

During these discussions with Petrossian, Peterson drafted a memorandum of understanding that would include compensation for himself.

But UGA Office of Research Senior Legal Advisor Jessica Orbock told former Warnell Dean Mike Clutter via email that state law prevented UGA from giving Peterson a share of the profits — UGA could only reward him through “the established salary supplement process.”

According to state records, Peterson’s annual salary changed little from 2010-2013 but increased from about $83,000 to about $110,000 from 2013 and 2018 — a 32 percent increase in five years.

The draft memorandum was never signed or approved by anyone at UGA, but Peterson later used the MOU as the basis for his agreement with Richmont.

The IAD report also noted UGA caviar was rebranded and sold under a different label.

In an April 2016 email to a potential vendor, then-Richmont employee Cash Riley Jr. described Rochon Premium Brands as “a company I founded and the caviar product they provided and we white labeled” — white labelling being when a product is manufactured by one company and sold by others under different brand names.

Peterson seemed to be aware that rebranding UGA’s product under the Rochon label would be a problem if discovered. An October 2014 email from Peterson to Riley mentioned Riley using an article about “UGA caviar” in Rochon Premium Brands promotional materials.

“If someone at UGA sees that you are using that article for selling [Rochon Premium Brands], you will be getting a call from UGA Legal Affairs, and I will be getting a call from my dean!” Peterson wrote.

Misuse of UGA property

Peterson was also investigated for using a university-owned boat for recreational purposes.

The boat, named “Sea Hunt,” was used for recreational purposes by Peterson at his vacation home, nicknamed “Blue Horizon,” in Port St. Joe, Florida, according to the IAD report. The Petersons told IAD in interviews that family, such as Peterson’s wife and sister, as well as friends and neighbors, had been on the boat, but always were assisting with research, navigation or maintenance.

Eight emails flagged by IAD showed Peterson used the boat for fishing on numerous occasions between 2013 and 2017. GPS coordinates from the Sea Hunt’s sonar system confirmed this, with coordinates showing the boat at the vacation house or in the Gulf of Mexico outside Port St. Joe. IAD noted the coordinates matched up with three vacations in 2014, 2016 and 2017.

“Doug wants to fish as much as possible,” Joy Peterson wrote in an email to a Port St. Joe real estate agent in June 2014, five months before they purchased their $405,000 vacation home through JDP Investments.

A May 22, 2017 picture posted to Facebook by a friend of the Petersons showed the woman holding a cobia fish. The caption mentioned “Doug” and said the fish was caught in the waters off the coast of Port St. Joe. UGA reimbursed Peterson for travel-related expenses on the same day. More than $600 was reimbursed to Peterson for May 22-25 2017, when the Petersons were on vacation.

Even now, on Google Maps street view, a picture dated June 2015 shows the Sea Hunt parked in the driveway of Peterson’s vacation home.

While Peterson claimed to pay for all maintenance and fuel for the Sea Hunt, IAD found two instances between 2015 and 2016 where a purchasing card was used for maintenance.

Per the separation agreement, Peterson was required to return all UGA property including “boats, sonar units, computers, tablets, printers, phones, cameras, fish sampling equipment, nets, and rods/reels.”

Peterson said he is fully cooperating with the university during the investigation.

“I have already resolved the issue with the University in good faith, doing everything they’ve asked of me and I have always given 100 percent of my effort as a professor to the University,” he said in the emailed statement.