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Ball State bilked in 2nd scheme for $5 million

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Ball State University lost $5 million in an investment fraud scheme in addition to the $8.1 million scheme announced last week.

University Treasurer Randy Howard told The Star Press of Muncie that the U.S. attorney's office in Manhattan notified the university in 2011 that it was a potential investment fraud victim, prompting the school to conduct a deep review of all of its investment assets.

The U.S. attorney's office discovered the second $5 million investment. Howard would not disclose details of the investment, saying the university was following the recommendation of federal prosecutors "who feel it's in our best interest" to remain silent during ongoing investigations.

Howard called the bad investments "a combination of mistakes, negligence and criminal actions," adding Ball State is working with prosecutors.

In the previously announced scheme, Seth Beoku Betts, 38, was sentenced to four years and three months in prison for defrauding Ball State University out of more than $8 million, some of which prosecutors say he spent on cars and beachfront real estate.

The founder of Betts & Gambles LLC persuaded the university to give him money to invest in collateralized mortgage obligations, directing some of the money to disreputable investment dealers and spending some on himself, the government said.

Howard acknowledged public outcry over the lack of explanation as to how one BSU employee could make $13 million in bad investments. Howard called the bad investments "a combination of mistakes, negligence and criminal actions," adding Ball State is working with prosecutors and others to determine "which individuals fall into those various categories."

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  • Hmm...
    As a Ball State Accounting Graduate I am disheartened by these stories. The Accounting Department should be organizing an Internal Audit department. As to sitting on cash versus investing. Would you rather they try to earn something on that money or just stuff it under the mattress?
  • Who'se In Charge?
    Isn't Mr. R. H___ of one of the largest Indianapolis Law Firms the President of the Ball State Board of Trustees? If so, under his leadership, how could he allow this to happen?
  • Not Surprised
    BALL STATE - EMBEZZLEMENT REDEFINED
  • Broken
    The education system itself is broken. The influx of federal money has increased demand and artificially increased costs. Throwing more money at a problem is rarely a solution. Regarding the culpability, the state should take a look at the auditor who would have responsibility to verify the investments during the audit process. IBJ should promulgate the name of the auditing firm who was unable to detect such egregious behavior and see how they verified investments.
  • Hmmm so how many students could have used the Aid that are not able to go to BSU
    You don't need Federal Prosecutors to tell you that Senior BSU Leadership needs immedeate termination. They should have self audited the investments with internal audit and or a REPUTABLE PUBLIC ACCOUNTING FIRM OR THE STATE BOARD OF ACCOUNTS. Hello??? That Public taxpayer supported institution needs to stop blowing $$ on dumb advertising, blow out the inept management and get back to basics of affordable education. How many more losses happened?
  • Get while the gettin's good
    Smart enough to retire before more of this came to light: http://cms.bsu.edu/news/articles/2013/10/president-jo-ann-m-gora-to-retire-june-30 And to be one of the highest paid administrators in the US. Good work if you can get it...
  • Genius all
    Apparently the people who run this university are not too smart. what does it say about the education they provide?

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