MIDDLETOWN, Conn. (CN) – The former chief investment officer at Wesleyan University used the school’s resources and endowment to benefit himself and three hedge funds with which he had ties, Connecticut Attorney General Richard Blumenthal claims in Superior Court.
Thomas Kannam began soliciting donations for Wesleyan’s endowment in 1998 and was promoted to vice president and chief investment officer in 2005, according to the complaint. But “on numerous occasions since 2001,” he allegedly misappropriated charitable assets from the school.
Without the Wesleyan president’s permission, Kannam served as an officer for other organizations and concealed his relationships with the hedge funds Belstar Group, Vietnam Capital Partners and Advanced Device Technology.
Because of his position of trust, “Kannam was one of the most highly compensated employees at the university, receiving substantial remuneration in the form of salary and bonus, options, health insurance, retirement contributions and paid vacation,” Blumenthal claims. Kannam’s salary and expenses were paid through the university’s endowment.
Blumenthal claims a Belstar managing partner encouraged Kannam to exploit his position at Wesleyan for Belstar’s benefit.
“Such activities had no relationship to the charitable purposes of the university or the endowment and the university received no benefit from those activities conducted on behalf of or for the benefit of Belstar,” the complaint states.
Blumenthal says Kannam directed Wesleyan employees from the investment office to do work for Kannam’s personal hedge fund companies, and the projects consumed “countless hours” of the staff members’ time.
“Kannam also improperly applied for and received reimbursement from the university for expenses incurred on numerous business trips that he took on Belstar’s behalf,” Blumenthal claims.
He allegedly used the university’s resources, including its database subscriptions, to advance Vietnam Capital Partners’ “private business interests,” and he lobbied politicians in Washington, D.C., on behalf of Advanced Device Technology while on Wesleyan’s dime.
“Kannam conducted little to no university-related business on these trips,” Blumenthal claims. “Nevertheless, Kannam deceitfully requested and received reimbursement from the university for his travel expenses for those trips, which reimbursements were paid for with resources from the university’s endowment.”
Kannam also used endowment money for his personal expenses, including family vacations and a trip to the 2008 Super Bowl, Blumenthal says.
“Specifically, Kannam took several personal vacations during his employment with the university and, under the ruse of having participated in various out-of-state conferences, submitted fraudulent and doctored travel expense reports to obtain reimbursement for those trips from the university,” the lawsuit states.
Blumenthal says Kannam went with his brother to Torrey Pines, Calif., for the “golf outing of the century,” and traveled to England with his entire family to interview for a position with Cambridge University.
“Although the trip had in fact already been reimbursed by Cambridge University, Kannam fraudulently used his Wesleyan credit card for trip expenses and submitted fraudulent and duplicative cash expense reports to Wesleyan for the same trip expenses,” according to the complaint.
Kannam allegedly used Wesleyan funds to attend a wedding in India, take weekly trips to New York City, travel to Texas for Belstar meetings, and attend the 2008 Super Bowl with his brother.
Blumenthal wants Kannam and the hedge funds to pay $2,500 for each violation of the Solicitation of Charitable Funds Act.