Man Spent University’s $8M, Feds Say

     (CN) – The head of an investment firm bilked a public university in the Midwest for more than $8 million, using its money to buy luxury cars and a house in Florida, federal prosecutors claim.
     Seth Beoku Betts, founder of Betts and Gambles Global Equities LLC, told the university that he would invest the money in mortgage-backed securities, according to Scott Romonowski, a criminal investigator for the U.S. Attorney’s Office in Manhattan.
     The university, which is not named in the criminal complaint, sent three wires totaling more than $8 million to an attorney trust account maintained by Betts and Gambles, Romonowski claims.
     About $500,000 of the first $2.5 million transfer went straight to Betts’ personal bank account, according to a recently unsealed complaint in Manhattan Federal Court. Betts allegedly wired the rest to a Manhattan bank, where it was credited to a different attorney’s trust account.
     Betts transferred $3 million of the second wire to the brokerage account of a woman who purportedly shared some of it with Betts and his attorneys and spent the rest “on her own activities,” the complaint states.
     Betts blew the last $2.5 million investment on cars and a house, among other things, prosecutors say.
     “Betts transferred $325,000 of the university’s investment money to a car dealership for the purchase of a Ferrari automobile and a Maserati automobile,” Romonoswki says. “Approximately one week later, Betts transferred $1,545,000 of the university’s investment money to an attorney trust account in connection with his purchase of a personal residence in Florida.”
     Romonowski claims Betts “spent some or all of the remaining $455,000 on personal expenses, including more than $150,000 in payments to car dealerships.”
     Betts never returned the money and “has been emailing and calling representatives of the university through as recently as December 2012, negotiating to resolve the loss of the university’s investment,” according to the complaint. “At no time during those communications did Betts reveal that he spent at least the $2,500,000 received from the university in December 2008 on his personal expenses.”
     FBI Assistant Director in Charge George Venizelos called the alleged scheme “the most brazen form of investment fraud.”
     “Worse than misrepresenting how he would invest the university’s money, Betts made few investments at all — other than in luxury goods for himself,” Venizelos said in a statement. “You can’t take someone’s money to invest in mortgages and spend it on Maseratis.”
     Betts, 37, was arrested Thursday on one count of wire fraud. He faces up to 20 years in prison or a fine of twice the gross gain or loss from the alleged crime.

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