Ball State yet to receive any restitution in investment scam

Two men who were convicted of securities fraud after stealing $13.1 million from Ball State University have surrendered homes and sports memorabilia purchased with the money, but school officials say they haven't received any restitution.

"The case remains in the hands of law enforcement officials, as does any money recovered, since it's an ongoing investigation," university spokeswoman Joan Todd said.

George Montolio, 46, of New York and Seth Beoku Betts of Florida were convicted in federal court in Manhattan and sentenced to federal prison for their roles in the scams.

Court records show that Betts, who is serving a 51-month prison term, made restitution payments exceeding $694,000 in April — but none of it went to Ball State. Some of the money came from the sale of a waterfront house that he purchased in Florida with money he stole from the university, The Star Press reported.

A second suspect, George Cesar Montolio, forfeited Mike Tyson-autographed boxing gloves, a Mickey Mantle-autographed baseball glove and New York City apartment buildings to the government. The proceeds from the sale of the apartment buildings went to a lender who made loans against them, and court records don't indicate that he has made any restitution, the newspaper reported.

Montolio was sentenced more than two years ago to 36 months in prison for wire fraud.

Ball State officials said last fall that they didn't expect to recover more than about $500,000 of the money taken in the investment scam, which the university first learned about in September 2011. University officials have said Gale Prizevoits, its former director of cash and investments, altered records to conceal her investment of university funds in highly speculative mortgage bonds. She also was responsible for altering records that could have alerted the State Board of Accounts to irregularities in the investments from 2008 to 2010, records show.

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. She has not been charged but remains the subject of a criminal investigation, according to Valerie Kroeger, spokeswoman for Secretary of State Connie Lawson.

Ball State announced in December it had hired a former federal prosecutor and a CPA firm to evaluate its internal financial controls and investment portfolio and to develop a plan that identifies best practices for selecting brokerage firms and state-of-the-art software, creates a whistle-blower hotline operated by a third party and takes steps to ensure that a single safe-keeping firm holds all securities.