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Archive for Thursday, January 27, 2011

Charlette Blubaugh pleads guilty to conspiracy to commit wire fraud in KU ticket scandal

January 27, 2011, 10:59 a.m. Updated January 27, 2011, 2:03 p.m.

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Charlette Blubaugh plea agreement ( .PDF )

Former University of Kansas athletic department consultant, Thomas Ray Blubaugh, and his wife Charlette Blubaugh, left and center, leave the U.S. Federal Courthouse, in Wichita, Kan., on Wednesday, Dec. 8, 2010, after being arraigned on a charge of conspiring to commit wire fraud. Prosecutors say the couple, along with others, are charged with stealing athletic tickets and scalping them for cash to ticket brokers and third parties outside the university totally $5 million.

Former University of Kansas athletic department consultant, Thomas Ray Blubaugh, and his wife Charlette Blubaugh, left and center, leave the U.S. Federal Courthouse, in Wichita, Kan., on Wednesday, Dec. 8, 2010, after being arraigned on a charge of conspiring to commit wire fraud. Prosecutors say the couple, along with others, are charged with stealing athletic tickets and scalping them for cash to ticket brokers and third parties outside the university totally $5 million.

KU ticket scandal

David Ray Freeman, a Lawrence builder, pleaded guilty Tuesday to conspiring to commit bank fraud in connection with an anticipated building boom in Junction City.

— Another former ticket manager for Kansas Athletics Inc. has admitted in federal court that she took part in a scheme that converted stolen KU basketball and football tickets into tax-free cash through sales by ticket brokers and others.

Charlette Blubaugh pleaded guilty Thursday morning to one count of conspiracy to commit wire fraud, a crime that carries a potential prison term of 20 years and a $250,000 fine. She now is responsible for paying up to $2 million to the government, to cover her share of ill-gotten gains.

She admitted her guilt and entered into a plea agreement approved during a hearing before U.S. District Judge Wesley Brown, in federal court in Wichita. Sentencing is set for 10 a.m. April 14.

“Charlotte’s happy to get this matter behind her, and she accepts responsibility,” said John Rapp, one of her defense attorneys, after the 47-minute hearing.

Blubaugh is the latest in a string of former colleagues at Kansas Athletics to plead guilty in connection with the scam, which prosecutors say ran from 2005 to 2010. Already having pleaded guilty to conspiracy are:

Kassie Liebsch, a former systems analyst who took over the top tickets job after Blubaugh left the department.

Rodney Jones, who had been an assistant athletics director in charge of the Williams Fund.

Still awaiting trial is Ben Kirtland, who is accused of conspiracy. His trial is scheduled to begin March 8 in Wichita.

In February 2010, as federal agents had been investigating the ticket scam, Blubaugh resigned to take a job in the athletics director’s office at the University of Central Oklahoma, telling Kansas Athletics officials that she’d wanted to be closer to family. At the request of Kansas Athletics, she agreed to continue working with the department to help compile information about the ticket scam for investigators.

On Thursday in court, Assistant U.S. Attorney Richard Hathaway documented that Blubaugh actually had been an active participant in the scam. He said KU had hired Blubaugh away from her job in the ticket office at the University of Oklahoma, to become “kind of a consultant” to Kansas Athletics, where she would work her way up to become an assistant athletics director for ticket operations.

During that time, Hathaway said:

• Blubaugh became familiar with Liebsch, Jones and Kirtland and, in 2005, “a conspiracy commenced,” with Blubaugh providing tickets to “various employees” for illegal resale.

• Blubaugh received tickets from the department’s printer, and set aside “a large number” of season tickets — “originally at the request of Ben Kirtland” — for distribution through conspirators.

• Such diversion of tickets escalated to the point that tickets would be moved through her husband, Tom Blubaugh, who worked as a consultant to Kansas Athletics from August 2007 to January 2010, with documents authorizing his $115,000 of total compensation being approved by Kirtland.

• Received proceeds from tickets channeled through Liebsch, Jones and Kirtland. Tickets “moved” through her husband were sold through brokers in Oklahoma, and only the Blubaughs split those proceeds, Hathaway said.

• Failed to report any of the proceeds to the IRS nor to the NCAA through Kansas Athletics, therefore avoiding payment of taxes.

In all, Hathaway said, the conspirators reaped proceeds of more than $2 million from the ticket scam.

Now Charlette Blubaugh and others who have pleaded guilty are responsible for giving up the gains.

“You understand that you’re responsible for a monetary judgment of $2 million?” Judge Brown said.

“Yes, sir,” she responded.

“You understand?” he repeated.

“Yes, sir,” she said.

As part of her deal with prosecutors, she has agreed to provide information about all of her assets since 2005 — part of an examination into her financial situation that could include a lie-detector test.

She also must assist authorities in their investigation and prosecution of the case and “all related conduct.”

Her husband is scheduled to plead guilty to conspiracy at 10 a.m. Friday, also before Judge Brown.

Two other former colleagues, Jason Jeffries and Brandon Simmons, previously had pleaded guilty to failing to disclose the scam to authorities. They and others who already have pleaded guilty also await sentencing.

Interactive Timeline

KU ticket scandal timeline

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A previous version of this story incorrectly stated that Charlette Blubaugh pleaded guilty to bank fraud.

Comments

MacHeath 3 years, 2 months ago

I agree Kam_Fong. These folks are fu@@ing nuts.

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4everahawk 3 years, 2 months ago

Don't believe that 'keyboard-Kojaks' are trying to implicate Compton or Lungstrum in the ticket scam. Compton has plenty of money and Lungstrum just was getting some pretty fine benefits from being Lew's friend and helping Lew's daughter. I think the red flag is Lew circling himself with people in every walk of life that could benefit him in most any situation if needed. It just still seems odd that all this was going on right under his nose and he didn't suspect a thing! AND, for 5 years! Really? The Ron Olin hire a few weeks before he retires still puzzles many.

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Kam_Fong_as_Chin_Ho 3 years, 2 months ago

You keyboard-Kojaks crack me up! You keep implicating Lew, Compton and Lungstrum despite the fact that none of them are suspects. Can I play along? Okay, my turn: I saw Compton at Hy-Vee standing in line behind Laird Noller! How does Laird fit into to this? Later that day I saw Danny Manning at the McDonald's drive thru. The kid in the window handed him a soft drink and a bag. I'll bet the bag was full of cash or tickets.

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greenworld 3 years, 2 months ago

dont think these people will do the time that's been given to them. my brother got charged years ago with fraud and they charged him with 15-30 yrs and fined him. He did 90 days in a minimun fanility out in el paso. and another 90 days house arrest with ankle bracelet. These people will do probly less than a yr most of them if not 90 days -6 months. dont kid yourself. They will be right back out probly trying to scam somebody or make quick money. they might have millions of dollars buried somewhere and never half to work again. but you can guarantee one thing, they never will work around money , for any type of athletic department or financial institution again. i dont believe they cleaned out the whole department , im sure they were others involved and they might be have to go in a re-clean it out again in the next few years.

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4everahawk 3 years, 2 months ago

Some folks find it interesting that when Lew came to town and he started his 'friend' list, it included the chief of police, a federal judge, a multitude of attorneys and a very tight relationship with Compton. Just saying......

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MacHeath 3 years, 2 months ago

Folks! There has been no evidence, or even a hint of evidence trying Perkins, Compton, or anyone else in this town to this ticket mess. Why the heck would Compton be involved in a ticket scam? He probably pays enough to KU endowment to get seats wherever he wants them. Trying to tie in a respected judge into this mess, is just plain nuts.
Getting friends good seats is not the issue here.

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Jim Williamson 3 years, 2 months ago

Doug Compton, involved in something shady? I would be SHOCKED! /endsarcasm/

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greenworld 3 years, 2 months ago

Regarding Lew, doesnt seem like there is a pattern that goes hand in hand with those who do something wrong. It seems when it all goes down they all either run or retire. So maybe there was more to Lew resigning then what meets the eye. As in if you take or remove yourself from a situation it makes it seem like your not a part of it. Idk seems pretty shady to me. And then he only gets fined 4000.00 for the equipment. hell, thats chump change to a millionaire.

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4everahawk 3 years, 2 months ago

guess-again: Go back and look over the documents made available to the media when the investigation started........there were invoices from Mr. Blubaugh for his services signed off on for payment by the chief financial advisor and one of the associate athletics directors. Lew said he wasn't aware he was a paid consultant. That alone is gross lack of institutional control.

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Kontum1972 3 years, 2 months ago

in the tropics somewhere....fuji is not a bad place or new zealand...its one heck of a long flight and boat ride....but darn good fun!

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Justice2011 3 years, 2 months ago

Many gave up protesting their seat assignments in disappointment and disgust when they saw the Federal Bench sitting with Perkins year after year. Ralph had it right with the Judge Enjoys Court Side Company Article - "two pees in a pod."

LJW provided an opportunity for him to explain it and took it. "Since the beginning of the men's basketball season, John Lungstrum, chief judge of the U.S. District Court of Kansas, has sat courtside with Kansas University Athletic Director Lew Perkins. The two often can be seen in the background during televised games, Lungstrum wearing his lucky blue KU sweater.

"He's there as my guest," Perkins said. "We're friends, and we enjoy talking basketball with each other."

Said Lungstrum, "I guess I'm just a lucky guy, is basically what it amounts to."

The two met at a party a couple years ago, Lungstrum said. At the time, Perkins' daughter, Holly, was considering going to law school.

"He called me and said, 'You're the only person I know on the law school faculty. Would you mind talking to my daughter about law school?'" Lungstrum said. "I said I'll be happy to. ... That was the beginning of our having more than just a casual acquaintance."

Perkins' daughter ended up going to KU law and this year has a for-credit internship working in Lungstrum's chambers in Kansas City, Kan.

Lungstrum, a member of the Williams Fund, holds four season tickets.

During the summer, Perkins asked Lungstrum to come and sit courtside with him. Lungstrum said he was able to accept the offer in part because of his long-standing policy to not hear any cases related to KU.

"I never have taken KU cases because I'm on the faculty. I am conflicted out of any litigation that would involve the University of Kansas," he said. "If that were not the case, I probably would have declined Lew's offer to sit there because I recognize that I'm fairly visible sitting down there."

Guess so. Photo by Nick Krug

John Lungstrum, left, chief judge of the U.S. District Court of Kansas, sits courtside with Kansas University Athletics Director Lew Perkins during Saturday's men's basketball game against University of Texas.

Being chief judge of the Kansas district means overseeing administrative functions of the court - such as electronic records management, scheduling of dockets and court rules - in addition to a regular caseload. Lungstrum said he does not have any influence on the opinions of the other federal judges in the district.

The show goes on with at least 5 more people to sentence as this cover blanket unfolds. Will this never end?

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AS 3 years, 2 months ago

Were are there friends now?

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wprop 3 years, 2 months ago

The tickets were sold to brokers and others....the "others" should be busted for receiving stolen goods at the very least and banned from KU functuions....

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Maracas 3 years, 2 months ago

The Blubaughs look rather over fed. Very over fed. One wonders whether they do any exercise besides walking to the fridge. Must be nice eating on stolen money while you're going for the hat trick of stealing from your employer, their customers, and the government.

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SELF_RESPECT 3 years, 2 months ago

Conspiracy the day Rodney D Jones called Jeffries back from Nebraska and then he ran to Oklahoma to invite Charlette Stuart and Tom Blubaugh to join the "club"! Poor little Lebiesch sat right there and thought she could protect herself by knowing what role everyone played. Well who is the lowest of lows now??????? Oklahoma really should investigate the Stuart/Blubaugh ring. Those 2 knew how to make the computer system work for them and they learned that as a Sooner!!!!

Go KU

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friendlyjhawk 3 years, 2 months ago

"Charlotte is happy to get this matter behind her." None of this is behind her, she still has to pay the monies back and faces a jail sentence of some kind. Nothing is behind her-she has lots more misery to look forward too.

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SynjynSmythe 3 years, 2 months ago

'tis just a matter of time before we read about Mr. Perkins' indictment!

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yankeevet 3 years, 2 months ago

Wow; there are so many crooks in this town!!

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Steve Jacob 3 years, 2 months ago

Made the front page of ESPN.com, so it's big enough news.

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Vinny1 3 years, 2 months ago

This is seriously breaking news how?

If you thought anything other than a guilty plea was going to happen you're just naive.

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guess_again 3 years, 2 months ago

If you take the ticket issue off the table, I am still amazed that Blubaugh was allowed to repeatedly contract with and authorize payments to her husband for his "consulting services." And this wasn't any secret, it was apparently known to many.

This shows that on the expenditure side of the department, which involves people outside of the ticket office, that there was/is a serious lack of appropriate internal controls.

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Richard Heckler 3 years, 2 months ago

When I was working on houses in Bauer Brook, I noticed that Rodney was always at Doug Compton's house. It was always Dave Freeman(Junction City crime activity), Rodney Jones, and Doug Compton. In fact, I saw Rodney at Compton's birthday party just a couple of months ago. Lew Perkins was there too. Are these guys all involved in this? I'm not saying they are, I'm just curious. I know that Compton has many seats to basketball games. Is he paying for all of them? Usually where there's smoke, there's fire. http://www2.ljworld.com/news/2011/jan...

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Kontum1972 3 years, 2 months ago

wheres perkins fit into all of this?

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Number_1_Grandma 3 years, 2 months ago

Didn't she first deny any involvement and kept her job in the athletic dept.? Only when she was 'confronted' with evidence from others that she resigns or is fired? If so, I don't believe she deserves any leniency after she had her chance to come forward. Maybe I've got it wrong? Does anyone know for sure....

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Paul R Getto 3 years, 2 months ago

"As part of their plea agreements, the co-conspirators consent to cooperating with investigators and prosecutors as they pursue the case and related items." === Such a sad situation, where greed got ahead of common sense. How this unfolds and upon whom it unfolds will be most interesting and, in the end, tragic.

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