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Archive for Monday, February 7, 2011

KU considers options for recovering losses in ticket scandal

February 7, 2011

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Kansas Athletics Inc. knows it lost $1 million to $3 million, and maybe more, when at least six of its employees stole more than 19,000 tickets for football and men’s basketball.

What KU officials don’t know is how much of that money they’ll be able to get back.

“Nothing has changed,” said university spokesman Jack Martin, noting that the university’s intentions to seek financial compensation had been disclosed months ago. “We will pursue appropriate legal avenues to recover money from the tickets these individuals diverted.”

Now that six former employees have admitted their guilt in federal court, and four have agreed to jointly owe $2 million in a “monetary judgment,” attention is starting to turn toward just how the university and its athletics department might be made whole.

The short answer: They can’t. There’s no way to tell precisely how many tickets had been stolen, nor for how long, although an internal investigation conducted for the university estimated losses at up to $3 million.

The longer answer: The university and the department have options for getting at least some of the money back, even if they haven’t decided yet whether or how to pursue them.

“It is us, as Kansas Athletics, that will have to go after the restitution,” said Jim Marchiony, associate athletic director for external relations. “As soon as the courts decide everything, as soon as that process plays through, we will then determine what our next step is going to be.”

One step already is being taken: seeking coverage from a $250,000 insurance policy taken out by Kansas Athletics to protect against employee theft. The department filed a claim in October, and is awaiting a ruling.

“That is something we are pursuing,” Marchiony said.

Seeking repayment through the federal judicial system remains an option, although university officials remain uncertain about their prospects.

First off, the judicial process has not yet concluded. While six defendants already have pleaded guilty — and a seventh, Ben Kirtland, former associate athletic director for development, is scheduled to plead guilty Feb. 24 — none has been sentenced.

The four defendants who already have pleaded guilty to conspiracy to commit wire fraud also have agreed to be jointly responsible for a $2 million monetary judgment, but no such judgment can be imposed until U.S. Judge Wesley Brown rules on sentencings. Those are set for various dates in March and April.

As part of their plea agreements, the four guilty conspirators — Charlette Blubaugh, Tom Blubaugh, Rodney Jones and Kassie Liebsch — have agreed to forfeit assets gained through the tickets scam, and have agreed to submit to lie-detector tests, if necessary, to help identify undisclosed assets. Liebsch already has given up the 2008 Camry she’d purchased using cash gained through the sale of stolen tickets.

Any decisions about how much Kansas Athletics or Kansas University might be able to claim remains to be determined.

“The judge decides how much restitution is due to the victims,” said Jim Cross, a spokesman for the U.S. attorney’s office in Kansas. “The judge also decides the amount of forfeiture.”

Then there’s a matter of collecting on such claims, even if approved by a judge.

Richard Hathaway, the assistant U.S. attorney who has been prosecuting the conspirators, said after Jones’ plea Jan. 14 that when it came to forfeiture, KU would be eligible to apply for reimbursement through the Asset Forfeiture and Money Laundering Section of the U.S. Department of Justice.

Such proceedings could not begin until sentencings are determined.

And while the seven people identified through the university’s internal investigation — Jason Jeffries and Brandon Simmons are the others — either have or are scheduled to plead guilty in federal court, there’s been no word on whether prosecutors might be finished with their investigations. Hathaway consistently has declined to comment on such possibilities, and KU officials don’t plan on making any decisions until they have more information.

“We’ve been consistent, internally, not to try to project what might or might not happen,” Marchiony said. “We’ll just let the process happen and then decide what the next step is going to be. It’s impractical to try to project what’s going to happen.”

Comments

Alceste 3 years, 10 months ago

Lew Perkins must be owed some small change....

lvkufan 3 years, 10 months ago

Good Luck!!! The treasurer of our non-profit made off with several hundred thousand dollars. Plead guilty, agreed to and signed a restitution agreement with the court. Later filed bankruptcy. No jail time, no nothing.

bad_dog 3 years, 10 months ago

Debts for fraud, false pretenses, embezzlement and larceny are not discharged in either Chapter 7 or 13 bankruptcies.

OutlawJHawk 3 years, 10 months ago

Wonder if any tickets made it to Yellow House...

The tickets brokers/scalpers that purchased the tickets had to have some knowledge that something was not right. However, scalpers do not have enough status or press value for Hathaway to prosecute. Hathaway is a self promoting turd and one of the shadier prosecuters at the DOJ. God save us if he ever becomes a judge.

Alceste 3 years, 10 months ago

Don't for the over $250,000.00 that was "forgotten" when that boy took that money from KU on Wheels back when (1983); got convicted; than moved to....Colorado as I recall.....and didn't pay back dime one and it weren't pursued by our Court here in Douglas County.....

lionheart72661 3 years, 10 months ago

Or hey! They can sue another small business! No wait Perkins and Mangino are gone! Better idea, get the money from Perkins and Mangino!

Mary Ellen Hall 3 years, 10 months ago

Perkins I can maybe understand, but why Mangino? Or, did you just not like him?

sr80 3 years, 10 months ago

they can all head back to oklahoma after they are granted probation and be accepted with open arms.don't you just love rich educated a-holes.kissy!!!! kissy!!!!

sr80 3 years, 10 months ago

i wish they would of picked me for their team then,i could of skated with a couple of G'ss like lew baby did!!

imastinker 3 years, 10 months ago

At least it wasn't stolen from the state, but rather the athletic CORPORATION!

happyrock 3 years, 10 months ago

How inept is KU? $3 million? The word is that was their annual take. Heck, the Final Four in 2008 made these guys at least $500,000+. I guess now we want to sweep it under the rug and call it a day. Meanwhile, this crowd will serve 6-12 months and be about before Christmas to enjoy all the millions they have squirreled away. Can some grown-up please take charge ... and I don't mean you, Dolph.

irvan moore 3 years, 10 months ago

ain't gonna be no restitution, where they gonna get the money to pay back anybody?

gl0ck0wn3r 3 years, 10 months ago

Where is their CFO on this? Shouldn't their CFO have a fairly accurate picture?

evilpenguin 3 years, 10 months ago

Why are the dirty thieves only being made to return the things that they purchased with the stolen cash? Why don't they have to sell off all of their assets? Surely that would be a way to get the cash that they owe KU.

KU might not need the money, but that's not really the point. These people willingly stole and gained from the money, they should lose everything.

Ricky_Vaughn 3 years, 10 months ago

I say they don't get their money back. That's their pennance for having their heads up their a--es in the first place. Maybe next time they'll get their act together...

Resident10 3 years, 10 months ago

I have a question about the insurance policy. Isn't it risky to make a claim against the ins policy? I mean, what if the insurance company challenges? First, there is the mess of negotiating such a thing. Second, if the policy were to be litigated they could potentially lose. Part of the Ins company's argument would propbably be that KU should have known this was going on. And if that is the case, it seems the ground work for a class action on behalf of season ticket holders would be in place. That would be the worst thing that could come out of this. I can understand the reson for going after the policy amount but still.... Or am I reaching?

puddleglum 3 years, 10 months ago

it was suggested that R. Morningstar profitted by selling tons of final four group tickets, and now he has million dollar house in big Doug's playpen....why not just ask him for the money he made off of those tickets? He was in possession of stolen property and this surely qualifies for felony interstate mail fraud....Or will the NCAA just wait 'til the final four to make a move on this, painting our team in a shady color of blue and implying Brady was somehow involved.

calwt262 3 years, 10 months ago

KU won't get it from the Blubaughs...they spent all of their money at Golden Corral.

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