TECHNICIAN
friday august
24 2012
Raleigh, North Carolina
technicianonline.com
Gottfried loses $300,000 in alleged Ponzi scheme PONZI SCHEME:
Jake Moser Correspondant
N.C. State men’s basketball head coach Mark Gottfried lost more than $300,000 in an alleged Ponzi scheme. The Securities and Exchange Commission has charged a former University of Georgia football coach with running it. Gottfried and other high-profile sports figures collectively invested $80 million in the scheme allegedly run by Jim Donnan and Gregory Crabtree. Donnan, a member of the College Football Hall of Fame, is a former N.C. State quarterback who was named ACC player of the year in 1967. Donnan is charged with soliciting investors for a West Virginia-based company GLC. Crabtree was the company’s president, and the pair offered annual returns of 50 to 380 percent, according to the SEC. GLC was described to investors as a company that bought leftover merchandise from retailers and sold it to discount retailers or liquidators for a huge profit. In addition, the SEC alleges that Donnan assured his investors he was investing along with them, and that their investments were almost always used to buy presold merchandise. Therefore, profit was almost guaranteed. Only $12 million of the $80 million was used to buy this merchandise,
An investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors. Ponzi scheme organizers often solicit new investors by promising to invest funds in opportunities claimed to generate high returns with little or no risk. SOURCE: THE SEC
CHARLIE HARLESS/TECHNICIAN
Coach Mark Gottfried was one of several victims in an alleged Ponzi schemed that robbed many university athletic officials of several million dollars combined. Gottfried personally lost more than $300,000 to the scheme, allegedly run by an old friend and former N.C. State athlete.
and the rest of it was either spent by Donnan and Crabtree or used to pay fake returns to investors. Accounting professor Eileen Taylor said this scam has the characteristics of a typical Ponzi scheme. “It hasn’t been proven if Donnan did it, but the SEC has enough evidence to charge him,” Taylor said. “Like the Donnan case, Ponzi schemes typically involve unrea-
sonably high returns, and the perpetrators make their investors feel like they’re getting an exclusive deal. This alleged scheme is on the lower end of the scale probably because they didn’t run it long enough.” According to Taylor, trust is a key element to running a Ponzi scheme and is a reason they are so successful. “Those who orchestrate schemes
Chancellor dines with CHASS students
like this typically go after investors who trust them,” Taylor said. “Potential investors could be family members, co-workers or long time friends. For example, Bernard Madoff solicited investments from the Jewish community because he knew they’d trust him.” The SEC accuses Donnan of encouraging college football coaches, former players and other sports
figures he met while working as an analyst for ESPN and during his coaching career to invest in GLC. The SEC alleges that he told hopeful investors of other prominent football coaches that he had invested and made a profit. Taylor said there are several tells to a Ponzi scheme. “There are a few red flags that exist,” Taylor said. “If someone offers you unreasonably high returns, tells you the investment opportunity is exclusive and to keep it a secret, encourages you to re-invest your profits instead of receiving money, is evasive on paying you back or if it just sounds too good to be true, then it might be a Ponzi scheme.” Donnan faces a civil court case with a jury, according to Taylor, and these cases typically end with a fine. Jail time is rare, and usually the defendant has to sign a contract where they vow never to break the law again.
C-Stores receive a sweet addition
Laura Wilkinson
“I’ll be very candid with you,” Woodson said in reply to Griffin, “I don’t see us being very successful As part of his yearly meeting with in pursuing a large number of Ph.D. each college, Chancellor Randy programs in humanities. I’m preWoodson lunched with 19 students pared for that to be a hill to tackle.” from the College of Humanities and Yet he still praised CHASS for Social Science Thursday afternoon. being a strong college within a rich The students, chosen for their culture of science and technology. scholarship and research efforts, Alex Gloss, a doctoral student in were able to voice concerns to the psychology, asked the chancellor chancellor directly, a first for most what the long-term strategy was of them. for keeping resources for research, Woodson said talking to the stu- specifically those at the library. dents was one of the most exciting “Here’s the good news—we have things on his calendar. an amazing library, one of the high“I do this once a year with each est-ranked research libraries in the college, and I’ll do this once a year nation,” Woodson said. with each college as long as I’m Woodson said how much budgetchancellor,” Woodson said. “It gives ary stress libraries have been receivme a chance to learn more about ing. He also praised the new Hunt what’s going on in the college, [and] Library on Centennial Campus, what the college is facing.” which will boast more study rooms Micah Carter, sophomore in his- and state-of-the-art technology. tory, brought up the Jake Clayton, a issue of incoming Master’s student funds for research in English, said he at the University wanted the chance often going to engito learn and teach neering or another in “smart” classscience-based colrooms, rooms with lege instead of colupgraded technolleges like CHASS. ogy. The chancelChancellor Randy Woodson Wo o d s o n e xlor responded that plained N.C. State the Hunt Library often gets more money for the will allow this through 100 smart technology and agriculture sectors study rooms, including the fact that because of its history as a land-grant CHASS will have a strong presence institution. in the new libraries. “The state has been very resistant Woodson and the students then to ‘mission creep.’ They want uni- spoke about the University’s graduversities to stick to their missions,” ation rates and the value of an N.C. Woodson said. “We get more money State degree. for majors in science and technol“This is a much better university ogy.” than it’s perceived to be nationally He also mentioned this focus on and internationally,” Woodson said. science and technology has con- “I think its incumbent of us to protributed to CHASS’s lack of a Ph.D. mote the strength of N.C. State. program in the humanities. Kelsey We’re not 10 colleges held together Griffin, a Master’s student in his- by a football team.” tory, said she wished the humanities had a Ph.D. program she could CHASS continued page 2 pursue. Deputy News Editor
“I’ll do this once a year with each college as long as I’m chancellor.”
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TYLER ANDREWS/TECHNICIAN
Three C-Stores across campus are now selling Krispy Kreme Doughnuts. Prices are $1.39 for one, $5.99 for six and $11.99 for twelve.
Alex Petercuskie Staff Writer
This Monday, C-stores on campus began selling a new sweet treat, Krispy Kreme doughnuts, in order to offer a broader range of food options on campus and make study breaks a little sweeter for students. Since 2004, Krispy Kreme and N.C. State have partnered together to organize the Krispy Kreme Challenge, a race in which participants run two miles to the Krispy Kreme located on Peace Street, eat one dozen doughnuts and run two miles back to campus, all in less than an hour. The annual event raises money for the North Carolina Children’s Hospital, and is considered one of the top things to do before graduating from N.C. State. Jennifer Gilmore, marketing and communications manager
for Campus Enterprises, said of- wants and needs and encourage stufering Krispy Kreme is a fun way dents to eat healthy, well-balanced to provide more breakfast options meals, and enjoy treats like this in for University faculty and students. moderation,” she said. C-stores will offer a doughnut-andIn addition to expanding the coffee combo at variety of food opa discount price, tions offered at N.C. Gilmore said. State, the change is K rispy K reme a lot more practid ou g h nut s a re ca l for students currently available and faculty as well. at Bragaw, EmporiThe new addition um and Shuttle Inn will benefit both C-stores because students living on these locations atand of f campus tract the most trafbecause they wonít Manasa Chitluri, Psychology fic, said Gilmore. need to find transand Business Student Though only single portation to Krispy doughnuts are beKreme’s downtown ing sold right now, Krispy Kreme location. pies and doughnut holes will soon “While our students love their anbe offered. While Krispy Kreme nual run to Krispy Kreme, it’s too products may not be the most nu- far to walk to on a regular basis. tritious, Gilmore said she believes They are delivered fresh daily. We itís okay to indulge once in a while. “We try to appeal to a variety of KRISPY continued page 2
“I always wished they had Krispy Kreme on campus when I lived there.”
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