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| Seth Beoku Betts |
For nearly three years, Ball State kept quiet about being a victim of two multi-million dollar frauds.
Since learning in September 2011 of a $8.165 million fraud, the university did not speak about it because of an investigation by federal law enforcement authorities, according to The Associated Press. In fact, federal documents referred to Ball State as a public university in the Midwest.
That investigation led to the June 20, 2013, arrest of Seth Beoku Betts on a charge of wire fraud for operating a scheme to defraud the university.
The complaint said Betts, 38, misappropriated approximately $8.165 million of investor funds from the university. Recently in a Manhattan federal court, he received a sentence of 51 months in prison for defrauding Ball State.
In 2008, Betts approached Ball State and told an official that he would use the university’s money on its behalf to buy collateralized mortgage obligations then sell them to other buyers for profit, according to the FBI.
He had told the director of cash and investments for the university that he was principal of Betts and Gambles Global Equities LLC. The Star Press identified this official as Gale Prizevoits.
Prizevoits issued three contracts with Betts, dated in 2008 for July 3, July 24 and Dec. 9, according to the federal complaint.
Betts never returned money to the university. Instead, he made purchases to benefit himself.
Ball State fired Prizevoits in 2011 for violating university policy, according to the AP. She had altered the financial documents to keep the university from finding out about the Betts investments, which do not show up in the university’s audit report. The Star Press found that Prizevoits invested an additional $5 million, a case she hid from the university.
President Jo Ann Gora told The Star Press that the loss was not taken from donor funds. Instead, it came from long-term reserves for future projects.
“Worse than misrepresenting how he would invest the university’s money, Betts made few investments at all — other than in luxury goods for himself,” George Venizelos, FBI assistant director in charge, said in a statement in 2013. “You can’t take someone’s money to invest in mortgages and spend it on Maseratis.”
Betts used $325,000 from the university to buy a Ferrari and a Maserati on Dec. 10, 2008, according to the FBI. A week later, he put $1,545,000 in an attorney trust account toward buying a home in Boynton Beach, Fla.
The FBI report said he spent at least $455,000 more on himself — $150,000 of that going toward car payments.
Betts was ordered to pay $8.16 million in resitution to the university.
According to Palm Beach County records, Betts received the warranty deed Jan. 22, 2009, for the $1.2 million Florida house. On Dec. 11, 2013, the 4,662-square-foot house sold for $1,050,000, according to a listing by Karen Kennedy of Lang Realty.
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