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Prosecutor: No charges in Ball State investment scandal

MUNCIE, Ind. (AP) - A Ball State University financial officer did not violate Indiana securities law when she made investments to two men later convicted of stealing $13.1 million from the school, a prosecutor said.

Extensive reviews of records obtained by subpoena did not reveal any evidence of state securities violations, Delaware County Prosecutor Jeff Arnold told The (Muncie) Star Press for a story published Friday (http://tspne.ws/2aKJCOo ).

"While Ball State University was hopeful that other criminal charges could have been brought forth, after careful consideration with regard to the incident of investment fraud at Ball State University, including a summary report from the Indiana Secretary of State's securities division, no additional charges will be filed," Arnold said in a statement to the newspaper.

Criminal investigations of former Ball State investment director Gale Prizevoits by federal prosecutors and the Indiana Secretary of State also produced no charges.

Prizevoits invested in highly risky mortgage bonds obligations and altered records, conducted university business on her private email account and secretly signed contracts to avoid detection by superiors and auditors.

Ball State fired Prizevoits in 2011 for dishonesty, deceit, incompetence, neglect of duty, gross misconduct, and willful disobedience of BSU's investment policy. She could not be located for comment.

Ball State wrote off $2.9 million of the loss in fiscal year 2011 and wrote off the remainder in fiscal year 2014, Ball State Treasurer Bernard Hannon has said.

The university has received $1.5 million in restitution from the two men convicted on federal charges in the case and now considers the matter closed, spokeswoman Joan Todd said.

"While the university continues to recover from the impact of this crime, it appreciates all that law enforcement officials did to bring this matter to resolution and respects the decision of the prosecutor," Todd said in a statement.

Prizevoits made the investments in 2008 and 2010. The money was lost to criminals and others who spent some of it on luxury cars, real estate and sports memorabilia, some of which was seized and sold by federal authorities for restitution.

Seth Beoku Betts of Florida pleaded guilty in federal court in Manhattan to securities fraud, and George Montolio of New Jersey pleaded guilty to wire fraud.

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Information from: The Star Press, http://www.thestarpress.com

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