Ball State bilked in 2nd scheme for $5 million

Back to TopCommentsE-mailPrintBookmark and Share

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."


  • 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
  • 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?

    Post a comment to this story

    We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
    You are legally responsible for what you post and your anonymity is not guaranteed.
    Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
    No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
    We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.

    Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

    Sponsored by

    facebook - twitter on Facebook & Twitter

    Follow on TwitterFollow IBJ on Facebook:
    Follow on TwitterFollow IBJ's Tweets on these topics:
    Subscribe to IBJ
    1. Hiking blocks to an office after fighting traffic is not logical. Having office buildings around the loop, 465 and in cities in surrounding counties is logical. In other words, counties around Indianapolis need office buildings like Keystone, Meridian, Michigan Road/College Park and then no need to go downtown. Financial, legal, professional businesses don't need the downtown when Carmel, Fishers, North Indy are building their own central office buildings close to the professionals. The more Hamilton, Boone county attract professionals, the less downtown is relevant. Highrises have no meaning if they don't have adequate parking for professionals and clients. Great for show, but not exactly downtown Chicago, no lakefront, no river to speak of, and no view from highrises of lake Michigan and the magnificent mile. Indianapolis has no view.

    2. "The car count, THE SERIES, THE RACING, THE RATINGS, THE ATTENDANCE< AND THE MANAGEMENT, EVERY season is sub-par." ______________ You're welcome!

    3. that it actually looked a lot like Sato v Franchitti @Houston. And judging from Dario's marble mouthed presentation providing "color", I'd say that he still suffers from his Dallara inflicted head injury._______Considering that the Formula E cars weren't going that quickly at that exact moment, that was impressive air time. But I guess we shouldn't be surprised, as Dallara is the only car builder that needs an FAA certification for their cars. But flying Dallaras aren't new. Just ask Dan Wheldon.

    4. Does anyone know how and where I can get involved and included?

    5. While the data supporting the success of educating our preschoolers is significant, the method of reaching this age group should be multi-faceted. Getting business involved in support of early childhood education is needed. But the ways for businesses to be involved are not just giving money to programs and services. Corporations and businesses educating their own workforce in the importance of sending a child to kindergarten prepared to learn is an alternative way that needs to be addressed. Helping parents prepare their children for school and be involved is a proven method for success. However, many parents are not sure how to help their children. The public is often led to think that preschool education happens only in schools, daycare, or learning centers but parents and other family members along with pediatricians, librarians, museums, etc. are valuable resources in educating our youngsters. When parents are informed through work lunch hour workshops in educating a young child, website exposure to exceptional teaching ideas that illustrate how to encourage learning for fun, media input, and directed community focus on early childhood that is when a difference will be seen. As a society we all need to look outside the normal paths of educating and reaching preschoolers. It is when methods of involving the most important adult in a child's life - a parent, that real success in educating our future workers will occur. The website www.ifnotyouwho.org is free and illustrates activities that are research-based, easy to follow and fun! Businesses should be encouraging their workers to tackle this issue and this website makes it easy for parents to be involved. The focus of preschool education should be to inspire all the adults in a preschooler's life to be aware of what they can do to prepare a child for their future life. Fortunately we now know best practices to prepare a child for a successful start to school. Is the business community ready to be involved in educating preschoolers when it becomes more than a donation but a challenge to their own workers?