Monday, February 7, 2011

KU considers options for recovering losses in ticket scandal


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.”


Ron Franklin 9 years, 6 months ago

Increase ticket cost by $1 per ticket & you'll have your money back in 10 years.

bad_dog 9 years, 6 months ago

So completely uninvolved legitimate ticket purchasers should cover the reimbursements owed by convicted offenders because???

Jeff Coffman 9 years, 6 months ago

Isn't that what ObamaCare is all about?

Have people that are paying for insurance cover those who haven't.

Danny Hernandez 9 years, 6 months ago

since we're already paying for those that are uninsured that rack up huge hospital bills, we need this health care to force those that aren't insured to get will all work back to beating the crap out of moo

Jeff Coffman 9 years, 6 months ago

I would agree with you except that my $1500/mo premiums (my cost and my employers cost) have not gone down since Obamacare passed, in fact is has gone up, not to mention my taxes. Not too mention I pay taxes for 4 years, before this even sees the light of day...thank goodness it is going to get overturned.

Chris Bailey 9 years, 6 months ago

I guess I thought this was about basketball. But since you guys opened up this can! This Obama care is complete and utter CRAP! I work in a hospital and thanks to Obama care my premium went up $150/month. Which may not seem like much if you make good money you can budget for it. But imagine you are working in the housekeeping department and make $8-12 per hour. Suddenly that $150 is a big issue. Thus forcing people who HAD insurance to now choose whether to keep it or feed their family. This whole health care bill is riddled with crap! This shouldn't be a choice one has to make! I'm tired of the middle class always taking it for the rest of the country. We need to stop all the waste. Stop the welfare. Stop the free health care. Stop allowing noncitizens free care. What we need is to force those who draw these benefits to WORK! Make them work for their free money. Place their kids in a daycare provided by the government. I think the problem would fix itself! What I have to work to get my money??? Really?? I'd rather stay home and watch cable tv shows like Jerry Springer! Our society has allowed this to go on for far too long. If I want something I work for it I don't gripe and whine that I can't get it because I'm poor. I had a degree and my first one didn't work out. Did I sit and complain? No I started completely over and now have a pharmacy degree. I didn't graduate unitl I was 34 for the second time. Was it easy? Far from it! Granted some people need these benefits but far too many abuse them! Liberal or conservative you should be able to see that! Lets stop the campaining! I'm so and so vote for me! How much do we waste on campaining??? Stop the republican/democrat crap! Fix the country! Quit lying to us! We are not stupid! I hate when I get on a rant like this. I just see far too much of this abusing the system working in healthcare. You get very bitter and very tired of seeing it. The root of this problem is much deeper than us needing healthcare overhaul. I promise you that raising our insurance premiums will have consequences. It is making the problem worse not better. Too many things wrong with the bill. And why do WE the middle class always stand here and allow our government to keep taxing or increasing our debt? Thank you OBAMA! One and Done! Thats the theme in basketball lets hope its the theme with him as well! Stimulate jobs! We need those more than anything! Geez I'm done. Sorry for the rant. I usually shut up when this stuff is brought up!

Danny Hernandez 9 years, 6 months ago

I'm sure most of the money has been spent by the defendants and what ever is forfeited will be minimal in dollar amounts so I doubt Kansas ever gets more than 250K in forfeiture/restitution when it's all said and done. Oh yeah, the defendants will have to pay restitution to Kansas Athletics but it's not like they'll be earning top dollar when they're released from federal prison.
And while I'm at it, I'm sick of the words Ticket scandal..It's ticket theft!

theajayhawk 9 years, 6 months ago

Wonder if it is 250K per incident, per employee or is the coverage policy of 250k total. How much they get is the fine print...

ahpersecoachingexperience 9 years, 6 months ago

Here is the deal, they avoid jail time and ku gets it's money back while increasing football attendance. Following each home football game all involved bend over and grab their ankles in the endzone while fans pay $5 for each swift kick!

kureader 9 years, 6 months ago

No one cares about that ... put Lew in their place and charge $20 per swat with a fraternity "hazing" paddle. A little harmless hazing wouldn't hurt anything.

And, the money would be recovered before Homecoming.

theajayhawk 9 years, 6 months ago

I dont think people want to get any glimpse of those fat a@#$%, even if it is to kick,

Jeff Coffman 9 years, 6 months ago

You can't reverse the clock...Need to draw the line in the sand and move forward. If you get some money great, otherwise just move forward, the longer this drags the worse the bigger the black eye.

tcs 9 years, 6 months ago

I see no reason why they shouldn't garnish these peoples wages for the rest of their lifes. They stole the money and should be held responsible for paying it back.

Jeff Coffman 9 years, 6 months ago

Remember these people sold the tickets to brokers who actually probably made the real money. They probably didn't get face value, and the money is spent. I agree with garnishing their wages, but that is petty cash. KU will be lucky to get $100,000 outside of the insurance policy.

What would be better is to work with other universities, and identify that brokers that were involved in the scheme (even though they didn't do anything illegal) they weren't very ethical. I would single those brokers out and never do business with them again. The key is to get others to join the cause otherwise it won't work.

I'm not saying that these 7 people shouldn't pay, but they are the drug dealers at the corner of the street not the kingpins...and you won't get them with out a banding together.

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