Ball State will hire outside help to look at the fraud cases from 2008 and 2010 that totaled $13 million.
Ball State's Board of Trustees voted Thursday to allow its chair to hire outside resources without calling a board meeting on these decisions. This gives the chair, currently Rick Hall, the broad power to quickly hire outside help, allowing the board to avoid a cumbersome number of meetings, said Tom Taylor, vice president for enrollment, marketing and communications.
|
The $13 million loss 2008 $8.165 million Gale Prizevoits, representing the university as director of cash and investments, entered into three putative contracts with Seth Beoku Betts of Betts and Gambles. The contracts, dated July 3, July 24 and Dec. 9, totaled $8.165 million for buying collateralized mortgage obligations and selling them to make a profit. April 27, 2010 $5 million Once again, Prizevoits created a putative contract — this time with Blackhawk Wealth Solutions Inc. for $5 million. The contract states the company would get federal Treasury STRIPS, with Ball State receiving 25 percent of the net profits. However, $3 million of this money found its way to George Montolio of New York. |
Hall is using this new power to hire an attorney to "bring in someone with fresh eyes" to look at the two fraud cases the university was a victim in, Taylor said.
Deborah Daniels — former U.S. attorney and U.S. assistant attorney general and former Gov. Mitch Daniels’ sister — is currently at the Indianapolis office of Krieg DeVault and will take a look at the fraud cases.
Daniels and the university will review the case, looking for changes that can be made to better strengthen internal controls and prevent any kinds of fraud in the future.
"There are no absolute safeguards, but there are best practices," Taylor said. "The external folks the board will bring in will really [see if] those are the best approaches."
When the U.S. Attorneys' Office contacted Ball State in September 2011 about the university being a potential fraud victim, Ball State’s internal review uncovered two cases from 2008 and 2010 that involved investments made by Gale Prizevoits, former director of cash and investments. The university then handed the information over to the U.S. Attorneys' Office to investigate the potential fraud cases.
Taylor said the new review will also look through the university's past investments, to double check what he is confident was a thorough first internal review.
George Montolio, 48, of New York was sentenced March 7, 2013, to three years in prison for defrauding the university after receiving money from Prizevoits' investment with Blackhawk. Recently on June 5, 38-year-old Seth Beoku Betts of Florida received a sentence of four years and three months in prison for a separate fraudulent investment contract with Prizevoits.
Montolio and Betts were ordered to repay the university for $3 million and $8.165 million, respectively.
"What happened was really awful," Taylor said. "Everyone involved — the university and the board — is sick that it happened. Unfortunately, these things do happen. ... There are unscrupulous people who commit criminal activity."
Related articles:
- Ball State looks to recover from fraud cases
- Ball State victim of $13M total in fraud
- Adviser gets 4 years in prison for defrauding Ball State $8M
Read More
Building brotherhood and boosting GPAs at Ball State
By Meghan Braddy / 4 hours agoMan 2 Men changes the narrative for men of color at Ball State, offering a sense of community and academic support.
‘Carry forward the torch of liberation’
By WaTasha Barnes Griffin / YesterdayWatasha Barnes Griffin of YWCA Central Indiana stands by the commitment to eliminate racism and empower women in Muncie and Delaware County.
Ball State women’s basketball loses to Kent State in battle of toughness
By Elijah Poe / YesterdayThe Ball State women's basketball (20-6, 12-2 MAC) lost to Kent State (17-10, 8-6 MAC), 60-54, their second consecutive loss in the Mid-American Conference (MAC).
