Friday, January 16, 2015

Officials Finger-Pointing Over $13.1 Million Ball State Fraud

Ball State University fired an investment manager in 2011 over $13.1 million she invested in university funds with charlatans who defrauded the university out of the money, and who were later convicted in federal court of fraud. The employee in question, Gayle Prizevoits, was fired but never investigated by law enforcement. A day after State Rep. Terry Goodin (D-Austin) publicly attacked Delaware Co. Prosecutor Jeff Arnold for inaction on this case, Secretary of State Connie Lawson announced her office is conducting a criminal investigation in cooperation with Arnold's office.

According to the Muncie Star Press, Arnold called Goodin's criticism of his actions "reckless" and "foolish." "I would like to see her prosecuted as well as any other taxpayer, but somebody has to give me a case," Arnold told The Star Press on Thursday. "First, I have to have a victim that is willing to cooperate with an investigation. We prosecute everything we can when there is a case brought to us that rises to the level of probable cause, but we don't go out and chase cases, particularly when there has been a federal investigation of this magnitude."

Ball State hired Deborah Daniels, a former federal prosecutor and sister of former Gov. Mitch Daniels, to investigate the lost funds. Arnold told the newspaper he has had no conversations with Daniels, which seems a bit odd. A spokesman for the Secretary of State's office said the office had requested Arnold not discuss the ongoing investigation publicly. Arnold pointed the blame at the feds for not investigating the case. "The real question in this whole case should be 'why the feds did not pick up Prizevoits,'" Arnold told the newspaper. "What have they done with their investigation of her? Was she not a big enough fish? I don't know because I have never seen one piece of paper on an investigation. Nothing."

1 comment:

Anonymous said...

How is it that this investment manager was able to make multi-million dollar decisions without anyone else signing off on it? I have a very hard time believing folks higher up the food chain at Ball State didn't know what was going on. This Prizevoits may have dirty hands but it sounds more like she's taking the fall for some bigger fish.
I assume BSU had a third party investment advisor on board - these scams didn't raise any red flags? Most funds such as this are required to be parked in traditional investment vehicles. Often they are restricted to more conservative offerings. These scams were anything but traditional or conservative and an advisor with half a brain could have flagged this.