Originally published January 13, 2011 at 08:47a.m., updated January 13, 2011 at 02:26p.m.
Wichita The former head of the ticket office at Kansas Athletics Inc. pleaded guilty Thursday to taking part in a scheme to steal at least $2 million worth of athletics tickets, to reap a total of $5 million from their sales and to elude payment of taxes on the transactions.
And she told a federal judge that she’d accept spending up to 20 years in prison for her five years’ worth of crimes, condensed in an indictment to five words: conspiracy to commit wire fraud.
“From approximately age 22 to age 27, Kassie Liebsch made decisions and took actions which she now deeply regrets,” said David Bell, her attorney, after the hearing. “By pleading guilty today in court, she has accepted full responsibility for her decisions and actions. She looks forward to moving on to a new chapter in her life.”
As part of a plea agreement accepted and approved by U.S. District Judge Wesley Brown, Liebsch, now 28, also must repay up to as much as $2 million — either on her own or jointly with other codefendants in the case, should they be found guilty. She admitted to receiving $100,000 in illegal proceeds from the sale of tickets, and already has forfeited a 2008 Toyota Camry she’d purchased with cash received as part of the scheme.
Liebsch’s sentencing is set for March 30.
With federal agents looking on from the gallery, Liebsch also promised to cooperate with prosecutors in their investigation and prosecution of others said to be involved in the crimes. In exchange, prosecutors agreed to recommend a reduced sentence.
Rodney Jones, a former assistant athletics director in charge of KU’s Williams Educational Fund, also is charged with conspiracy to commit wire fraud and is scheduled to plead guilty at 10:30 a.m. Friday, also before Brown in U.S. District Court in Wichita.
Others charged are Charlette Blubaugh, who preceded Liebsch as leader of the ticket office; Blubaugh’s husband, Thomas Blubaugh, who served as a paid consultant to the athletics department; and Ben Kirtland, who had been Jones’ boss as associate athletics director for development.
The Blubaughs and Kirtland are scheduled to stand trial beginning Feb. 15, although Kirtland is seeking a delay to give his attorney at least 30 additional days to review evidence: nine boxes of documents provided by KU, plus disks containing 12,000 pages of e-mails involving Kirtland and another 50,000 e-mails involving other alleged co-conspirators.
“Counsel would suggest that the charges in this case are unusual, if not novel,” attorney Robin Fowler wrote, in his request for a delay.
Brown has not yet ruled on Kirtland’s latest request — he had rejected an earlier one on procedural grounds — but the judge did acknowledge Thursday that the case against Liebsch involved an oddity: While Liebsch arrived at the hearing facing up to 30 years in prison for conspiracy to commit wire fraud, such a sentence would presume that the case had involved a financial institution.
“KU is not a financial institution,” he told attorneys, ruling that the maximum sentence therefore would be reduced to 20 years in prison.
Richard Hathaway, assistant U.S. attorney, noted that other portions of the case involved having ticket brokers write checks to cash at out-of-state banks so that the money could be “given to intermediaries to give back to conspirators in Kansas.”
Earlier in the hearing, Brown had acknowledged the complicated nature of the conspiracy, instructing Hathaway to describe the facts of the case slowly and deliberately.
“It’s quite a caper,” Brown said.
Specifically, Hathaway said:
• Liebsch graduated from KU in 2005, and was hired by Charlette Blubaugh as a systems analyst in the ticket office, with responsibilities to serve as a liaison between the ticket office and about 10 development officers, including Jones and Kirtland.
• Liebsch received requests for tickets from Jones and Kirtland, and originally sought permission from Charlette Blubaugh before filling them — until Charlette Blubaugh told her that a group of tickets had been “separated” for the pair and that Liebsch should “never tell Rodney and Ben ‘no’ regarding a request for tickets.”
• In 2005, Liebsch began receiving cash from Jones, and received instructions from him how to convert cash into money orders in amounts that would allow for avoidance of currency reporting requirements.
• Liebsch joined the conspiracy, knowing that tickets were being taken for sale to third parties, in violation of university policies; accepting cash from such sales; and engaging in a phone conversation with Charlette Blubaugh, Kirtland and others that included Charlette Blubaugh discussing plans to manipulate the department’s computer system before responding to requests from law enforcement regarding ticket assignments.
While the ticket scheme is said to have started in 2005, its existence became exposed early last year. Jones had been placed on administrative leave, Charlette Blubaugh had resigned to take another job in Oklahoma, and federal agents had been asking questions within the athletics department. KU announced in March that it was conducting its own investigation, while federal authorities were pursuing their own.
KU’s internal report, released in May, would identify Jones, the Blubaughs, Kirtland and Jones as conspirators. Two other former department employees — Brandon Simmons and Jason Jeffries — also were named in the KU report, a document that included financial details about more than 20,000 tickets for regular-season football and basketball games that had been improperly diverted for conspirators’ personal gain.
Liebsch had been cited in the report as having helped expose the scheme. Only later, when news of the federal indictments was released Nov. 18, did Liebsch resign from Kansas Athletics.
Simmons and Jeffries already have pleaded guilty in federal court to failing to notify authorities about the scheme, and now are cooperating with prosecutors and awaiting sentencing.
As the scandal unfolded, Lew Perkins announced in June that he would resign as athletics director at the end of the 2010-11 school year. By September, however, Chancellor Bernadette Gray-Little had accepted Perkins’ departure “effective immediately,” a full year ahead of schedule.
In the plea agreement, Liebsch said she and her co-defendant misled Perkins into believing there was a computer system in place to prevent tickets from being stolen, converted or taken by fraud.