A report released Friday by a former federal prosecutor who investigated the Ball State University investment scandal does not include what everybody wants to know: How did a lone employee, Gale Prizevoits, the former director of cash and investments, invest $13.165 million with two criminals without the knowledge of anyone else at the university?
“There was not a detailed, play-by-play report about what transpired and how these investment frauds were accomplished,” Indianapolis attorney Rick Hall, chairman of the Ball State board of trustees, told The Star Press Friday, after he and President Paul Ferguson appeared before the State Budget Committee.
“That information was reviewed by (CPA firm) Crowe Horwath and (former U.S. Attorney) Deborah Daniels,” he said, “and we will provide information in that regard to prosecutors, and they will make a decision as to who should be prosecuted.”
Hall told the State Budget Committee, meeting in Richmond, that the university doesn’t expect to recover any more than half a million dollars of the investments made with two perpetrators of securities fraud, one from Bronx, N.Y., and one from Boynton Beach, Fla. Both pleaded guilty to federal charges . . .
Hall told lawmakers: “We had a single individual, our director of cash and investments, who intentionally decided to circumvent our internal controls. She knowingly entered into investment contracts outside the scope of the investment policy, and subsequently proceeded to try to cover up those efforts.”
He added, “We had internal controls in place that should have prevented this fraud. Individuals with responsibility of following those internal controls failed us. Those individuals are no longer with the university, so the personnel has changed. This loss of money was not the result of a flawed system. This was a result of flawed individuals.”
In an interview, Hall declined to name any responsible parties other than Prizevoits, saying, “I don’t want to dive into the gory details and re-live that. It’s important to move forward with best management practices in place.”
Prizevoits was fired, but no other BSU employees in the controller’s office or business affairs were disciplined . . .Here's the reaction of state lawmakers:
“Thank you, folks, for realizing the problem and stamping it out immediately,” Rep. Terry Goodin, D-Austin, told the two BSU officials. “And I think you guys are doing a great job.”
Rep. Tim Brown, R-Crawfordsville, said Ball State’s transparency “re-establishes and elevates your trust in this state.”
“I appreciate your response today,” said Sen. Luke Kenley, R-Noblesville, who chairs the committee.I guess nobody cares how a person who wasn't even remotely qualified for the job she was hired to do wound up in that job in the first place. Isn't the fired employee living in Florida with one of her former supervisors?