For nearly three years, Ball State kept quiet about being a victim of a multi-million dollar fraud.
Since learning of the fraud in September 2011, the university did not speak about it because of an investigation by federal law enforcement authorities, according to The Associated Press.
That investigation led to the June 20, 2013, arrest of Seth Beoku Betts on a charge of wire fraud for operating a scheme to defraud the university.
The complaint said Betts, 38, misappropriated approximately $8.165 million of investor funds from the university. Recently in a Manhattan federal court, he received a sentence of four years and three months in prison for defrauding Ball State.
In 2008, Betts approached Ball State and told the official that he would use the university's money on its behalf to buy collateralized mortgage obligations then sell them to other buyers for profit.
He had told her that he was principal of Betts and Gambles Global Equities LLC. She then issued three contracts, dated in 2008 for July 3, July 24 and Dec. 9.
Betts never returned money to the university. Instead, he purchased a Ferrari, a Maserati and a $1.5 million home in Florida, according to an FBI press release.
“Worse than misrepresenting how he would invest the university’s money, Betts made few investments at all — other than in luxury goods for himself," George Venizelos, FBI assistant director in charge, said in a statement in 2013. "You can’t take someone’s money to invest in mortgages and spend it on Maseratis.”
Ball State fired the official in 2011 for violating university policy, according to the AP. President Jo Ann Gora told The Star Press that the loss was not taken from donor funds. Instead, it came from long-term reserves for future projects.
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