Ex-Ball State official still criminal target

MUNCIE – Ball State University says it still has not received any restitution from two securities fraud defendants who stole $13.1 million.

Meanwhile, a third suspect, Gale Prizevoits, BSU's former director of cash and investments, remains the target of a criminal investigation.

Asked about the status of the investigation of Prizevoits, the Delaware County prosecutor referred The Star Press to Indiana Secretary of State Connie Lawson's office. "This case is still under investigation," said Valerie Kroeger, Lawson's communications director.

Federal court records for the Southern District of New York in Manhattan show that Florida con artist Seth Beoku Betts, who is serving a prison term, made payments of restitution exceeding $694,000 in April.

However, Ball State says it hasn't received any of those funds.

"The case remains in the hands of law enforcement officials, as does any money recovered, since it's an ongoing investigation," BSU spokeswoman Joan Todd said. "We do not have any new information."

When he was sentenced a year ago to 51 months in prison for his plea of guilty to securities fraud, Betts told U.S. District Judge Shira Scheindlin, "I stand before you today completely humiliated and embarrassed. I embarrassed my folks, my family. For all intents and purposes, I'm a pauper. I'm destitute. I'm broken ... You will never see me in front of you ever again. That's all I have to say."

To make partial restitution of the $8.165 million he stole from Ball State, Betts sold a waterfront house that he purchased in Palm Beach County, Fla., with money he stole from the university.

The BSU funds that Prizevoits wired to Betts to be invested were hijacked by a California attorney, according to Betts' attorney.

"But even so, he wasn't supposed to be spending Ball State's money on homes and cars," the judge said. "You know that. I know in many such schemes people say, 'Well, it will be OK because I'll get it back and I'll make them whole, so I'm stealing for the moment but I'll put it back in the till.' Then if you don't get it back, it doesn't go into the till."

Assistant U.S. Attorney Tim Kasulis called Betts, whose prior record included arrests for drunken driving, ticket scalping and illegal use of credit cards, "a schemer who was intentionally defrauded by other schemers, which, as your honor knows, does happen with some regularity, unfortunately."

Kasulis did not return phone or email messages from The Star Press seeking comment on the status of restitution payments to Ball State. The U.S. attorney's public affairs office in Manhattan was of no help in explaining the status or the restitution-payment process during the past two weeks.

Prizevoits also lost millions of dollars of Ball State funds to George Cesar Montolio, Bronx, N.Y., who was sentenced more than two years ago to 36 months in prison for his plea of guilty to wire fraud.

He forfeited Mike Tyson-autographed boxing gloves, a Mickey Mantle-autographed baseball glove and New York City apartment buildings to the government, but it appears that the proceeds from the sale of the apartment buildings went to a lender who made loans against them.

Court records indicate no restitution payments being made by Montolio.

"Just, I apologize to my family, my parents, my fiancee and also apologize to all of the corporations I have defrauded," Montolio said at his sentencing hearing.

"The defendant had investors wire millions of dollars into an account he controlled to purportedly purchase U.S. Treasury STRIPS," federal Judge Deborah Batts said at the sentencing hearing. "The defendant never purchased any Treasury STRIPS but used the money to buy real estate and other assets. One of his investors was, yes, a state university ..."

Betts purportedly invested BSU's funds in highly risky collateralized mortgage obligations.

Ball State fired Prizevoits in 2011 on grounds that she made a prolonged effort to cover up the investments from discovery by her superiors, by the State Board of Accounts and by internal auditors.

In January, the Indiana Secretary of State acknowledged that its securities division's prosecution assistance unit was investigating Prizevoits after a state representative complained that she was being let off the hook.

At the time, Arnold questioned why the federal government didn't prosecute her.

Call Star Press reporter Seth Slabaugh at (765) 213-5834. Follow him on Twitter: @SethSlabaughTSP.