Settlement caps CSU liability in Parish caseJudge approves deal; school to pay $3.9M By Kyle Stock (Contact)
The Post and Courier
Wednesday, May 14, 2008
A federal judge has approved a $3.9 million settlement that shields Charleston Southern University from further liability in the multimillion-dollar fraud of Al Parish, its former star economist. 
The Post and Courier Al Parish In documents filed Monday, U.S. District Judge David Norton said the agreement would be fairer and more efficient than allowing aggrieved investors to individually seek restitution from the Baptist institution. "The fairness of this solution is clear in light of the alternative," Norton wrote in his opinion. He added that if the settlement was not approved, the result would be "a drawn-out, inefficient and chaotic administration of justice, assuming justice in those circumstances could be achieved at all." David Dantzler, attorney for the receiver in charge of collecting and selling off Parish's assets, said the ruling was a big victory for the 500 or so people and businesses who claimed losses in the economist's Ponzi empire. "Beauty is in the eye of the beholder," Dantzler said. "But we believe it is beautiful." J. Rutledge Young Jr., CSU's attorney, said the agreement was a great deal for investors and the school. In an April hearing he argued that CSU is cash-strapped and eventually could have been forced out of business by "outcome-unpredictable" lawsuits. "It is critical for CSU to be able to put this issue behind us," Young said last month. Nine of Parish's investors objected to the settlement. Their lawyers said the receiver did not have the legal authority to settle the case for all investors and that the court did not have the authority to bar lawsuits against the school. Norton struck down both arguments Monday, though investors have 10 days to ask him to reconsider his decision. They also could appeal his ruling. Government investigators said they built a strong case that CSU could be held liable in part for Parish's actions. The school consented to Parish handling investments on campus and knew as early as 2006 that Parish was not running his "informal investment pools" as he had represented them, according to Norton's opinion. Parish often met investors in his university office and convinced many of them that the mathematical research he conducted on the job would help them generate outsized returns. CSU acknowledged no wrongdoing in the agreement. A school spokesman declined to comment Tuesday, referring all questions to Young. However, the publicity from the case has already hurt the school, Young said. CSU's assets are mortgaged "to the hilt," some $2.5 million in donation pledges have been withdrawn and the school has postponed the building of some classrooms and a new dormitory, he said. Most of the university's $3.91 million payment would be covered by insurance, with $160,000 coming from CSU coffers. As part of its settlement, the private university, which lost $8.4 million of its own savings under Parish's care, agreed to surrender its claim on its lost funds unless the other victims receive at least 18 percent of their investment back. That compromise that would make an extra $1.5 million available to other investors. It is the second time Norton has upheld such a structured settlement in the Parish case. Dantzler struck a similar deal in mid- December with Parish's wife, Yolanda Yoder, and is negotiating several more possible agreements, though he declined to provide details. "It gives us some confidence we should be able to use this (type of settlement) again under the appropriate circumstances," Dantzler said. Parish, who was charged with fraud and fired by CSU almost a year ago, pleaded guilty in October to two counts of mail fraud and one count of providing false information to the Securities and Exchange Commission. Legal experts have said they expect the former professor to receive a 15- to 20-year prison term when he is sentenced June 26, though federal prosecutors have recommended a minimum of 30 years. Reach Kyle Stock at 937-5763 or kstock@postandcourier.com. Reach Schuyler Kropf at 937-5551 or skropf@postandcourier.com. |
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Comments
This article has 10 comment(s)
Posted by Thomas1776 on May 14, 2008 at 2:22 a.m. (Suggest removal)
nawwwwww. He will get 10 years or less. Take him in front of that 9th Circuit Court Judge Young and he will get house arrest for 1 year.
Posted by SuzieQJones on May 14, 2008 at 7:41 a.m. (Suggest removal)
He should get a life sentence like the life sentence he gave to the folks that he stole from. Parish didn't promise the large (30%) returns to most of these people, it was closer to 9%. Really bad things have happened to some of these people, and NO, they didn't deserve this.
Posted by JohnS on May 14, 2008 at 8:19 a.m. (Suggest removal)
Talking about totally dropping the ball. CSU gets scammed for 8 million and then has to cover itself as if they were responsible for this mans personal actions.
Every person at having to do with human resources and finance at CSU should be made to take auditing 101. Every 20 year old in the class will tell you that outside audits are required from investing firms. J Hunter is an accountant he should know better.
Posted by ColdBeer on May 14, 2008 at 8:46 a.m. (Suggest removal)
The people that did wrong in this case all need to be held accountable. The only problem I have with the law suits though is that the lawyers are going to be the only ones making money here. I doubt many that lost their savings will get much back.
Posted by ccfromsc on May 14, 2008 at 10:03 a.m. (Suggest removal)
This is a joke. David Norton should be fired as a judge. How can he state and stop any further lawsuits? This is NOT fair at all, he is blowing smoke up someone's arse. For close to 20 years CSU lauded and applauded Parrish and shoved him out to the community. Now they should accept their responsibility in this case. I bet if this judge had any relatives or friends involved in being scammed this "settlement" would not be going through. May I remind all those here that Hunter the president of CSU went with Parrish on vacation trips. To the British Virgin Islands, where Parrish wrote about starting off shore businesses to launder money. Also they went to the Cayman Islands... The money laundering capital of the world. Now this so-call putz of a judge stops the CSU's liability in this? At this rate Parrish will do less than 3 years.....
Posted by LowcountryMoose on May 14, 2008 at 10:05 a.m. (Suggest removal)
God will punish the school for changing its name from Baptist College.
Posted by candygirl on May 14, 2008 at 1:31 p.m. (Suggest removal)
Interesting to see the final outcome of all this.
Posted by NCWT on May 20, 2008 at 7:32 a.m. (Suggest removal)
Judge Norton specifically stated in his order that he did not consider CSU's argument that it could become insolvent if it had to defend multiple investor claims. He also detailed CSU's actions in promoting Parrish. To me these were all reasons not to approve the settlement. The school should be punished severely, not protected.
I am sure that Dantzler is telling the truth when he says this settlement is "beautiful". This equals more money in the pockets of the receiver and Troutman Sanders. Like Yolanda Yoder, CSU is another bad actor that has been protected by the Court, the receiver, and its attorneys.
Posted by Perkinsure on June 27, 2008 at 12:43 p.m. (Suggest removal)
I think it is a good deal for CSU. CSU obviously has not done anything to be considered fraudulent. Why would a university that is on a limited (very limited) budge lose 10 million (not 8 million) to back someone when there is no financial gain on their side. Many of CSU's professors and doctors lost their retirement because of Parish.
Dr. Hunter may have gone on trips with Parish, but Dr. Hunter makes a substantial amount of money himself as almost all college presidents do. Parish obviously did a good job conceiling all of his dealings. He has worked in and with the goverment, he was an economical forecaster, he was world renown, and he managed to stay ahead of the SEC for years. He duped pretty much everyone in this case. The loss itself of the 10 million for CSU was backbreaking enough.
It just does not make sense for someone to be in on a scam when it is going to cost them 10 million. If they knew what he was doing then they would not have invested 10 million with him.
Thats about the equivilent of an Insurance company putting life insurance on someone knowing they have AIDS. It does not make much sense.
Posted by Perkinsure on June 27, 2008 at 12:52 p.m. (Suggest removal)
Unfortunately investing with Parish is much like voting for Obama. Just as Parish promised great returns and a better life, Obama promises a better life and more benefits. In reality Parish promised people these great returns and just took their money. Obama has admitted that he is going to institute the largest tax increase in history, and still people want to vote for him. He gives all these speeches about change, and yet there is no outline or plan for that change. Just like there was no outline for plans and investments for Parish.