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Honey, I Lost the Endowment

Al Parish has been known for his flashy wardrobe and big spending ways in Charleston, S.C. His collection of fancy pens was believed to be worth hundreds of thousands of dollars. And the Web site of one of his investment companies featured a cartoon superhero version of Parish, dubbed “Economan.”

An economics professor at Charleston Southern University, Parish was the go-to guy for business leaders, local reporters, and people with a little money to invest. He provided advice, analysis and — through several investment companies — a great way to get rich. Except for one problem: According to a suit filed by the Securities and Exchange Commission last week, the reports that investors received were false and the money invested — about $134 million — is almost all gone. As SEC investigators attempted to question Parish, he claimed to be suffering from amnesia and checked himself into a hospital, so he has not commented on the mess, leaving investors and investigators very much in the dark.

One of those investors is Charleston Southern, where the board thought so highly of the university’s star professor that it gave his various funds $10 million from the endowment to invest. The university is now suing to recover the funds, but the board chair acknowledged in an interview Saturday that it “doesn’t look good” for there to be any money left to recover.

Johnny E. Ward, the board chair, said that he didn’t know the exact size of the university’s endowment. But several databases report (based on information prior to last week) that the university’s endowment is worth just over $13 million. The university’s last tax form on record with GuideStar, which collects such documents, reports investment funds of about $18 million.

Because the university’s endowment isn’t large, Ward said, funds from it “aren’t used for everyday operating capital” and “we don’t see this as something that will not cause us to operate in the black.” At the same time, Ward said that there would need to be “adjustments” in the university, if the money is not recovered. “We are just praying that the money might be found somewhere and that we could recoup some of it,” he said.

Ward said that he did not know if Parish proposed investing the university’s money or if the university went to him. Ward said that the board’s Investment Committee, of which he is not a member, brought the idea to the full board. “We thought it looked like a good idea because of the high returns he was getting,” Ward said.

While Parish remains listed in the university’s online directory, Ward said he is “no longer an employee of the university.” Ward declined to describe the nature of Parish’s loss of employment status.

Charleston Southern is a university of about 3,000 students, and Ward described it as a supportive community, with shared Baptist values. “We all just can’t believe it,” Ward said. “It’s just terrible. We’re completely at a loss for words. We just had all the confidence in the man — everyone used him all the time for his economic forecasts. It’s just unbelievable.”

According to the SEC complaints, Parish sold interests in five investment funds from 1986 until recently. Four of the funds were described as “informal pools of money” and they had different types of investments — commodities and securities futures, bonds, stocks, etc. One of the funds focused on “hard assets” such as jewelry and art.

Investors and would-be investors were shown detailed financial results for the various funds, and those results suggested that they were earning substantial rates of return. According to the SEC complaints, however, “investors received information grossly misrepresenting the amount of assets in the respective funds and misrepresenting the rates of return.”

The SEC complaint added that “without disclosure to the investors, virtually all of the assets of the funds have been dissipated.”

Scott Jaschik

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Comments

Embezzlement

Looks like a classic case of theft. Enron all over again? Hopefully this guy won’t be able to use “amnesia” to stay out of prison.

Craig C, political pundit at http://blogresponder.blogspot.com, at 8:01 am EDT on April 9, 2007

Theft from endowment fund

Sad story...I hope somebody like Andrew Cuomo goes after this guy. He’s hurt a lot of innocent people and he should do hard time in jail so he can recover his memory. I’m sure he’ll find it somewhere in there.

feudi pandola, at 8:25 am EDT on April 9, 2007

And they say the battles in academia are vicious because the stakes are so small! Now we know there must be some other reason.

Sarah Schneewind, at 11:51 am EDT on April 9, 2007

Amnesia is Serious!

The amnesia mentioned in the above article can be scary and should not be taken lightly. I know because of an aunt who had it. It is my sincere dream that he receives the treatment he needs and can be made whole again one day. Forgetting something like this must be terrible and all the other bits that go with it. God bless.

Joe, at 1:55 pm EDT on April 9, 2007

What did he Buy?

My question is what he spent the money on? How do you spend 134 Million! Cars? Houses?

Greg, Mortgage Broker at North Marietta Mortgage Brokers, Inc., at 1:55 pm EDT on April 9, 2007

Really Serious?

One has to be rather gullible to believe the Professor’s claim of amnesia is true.

Skeptic, at 2:15 pm EDT on April 9, 2007

This is criminal and should be made an example of the worst kind. LIfe in prison and he will have a long time to recover from his amnesia problem! Case CLOSED!

pie, at 2:25 pm EDT on April 9, 2007

this is sad. no one takes better care of your money than yourself. rb

richard browne, at 2:35 pm EDT on April 9, 2007

Money Money

Yes, his memory would be fine if he hadn’t been caught. I live here in Charleston and this is headline news down there.

Chris Elliot, at 2:55 pm EDT on April 9, 2007

Conned

Sounds like a typical con man. It seems religion affiliated investments have this happen more often than other investments. Shame on the the school’s trustees and investment committee. How could they possibly think it wise to place the majority of its investments with one person? It would not surprise me to learn, when they dig deeper, someone on the board or investment committee received special favors.Trust but verify! I can’t imagine any donors are going to feel well treated, either.

AJ, at 2:55 pm EDT on April 9, 2007

The Endowment Board was grossly incompetent and did not understand Board Governance or have a knowledgable investment or audit committee to prevent “good old boy investments".

Ed, at 3:00 pm EDT on April 9, 2007

Too Good to be true

When it sounds too good to be true, it is too good to be true. Amnesia? Not when it came to providing his investors with cooked investment reports. If he doesn’t serve as much time as a simple carjacker then the judge and jury will have been fooled as well.

Lowell, at 3:00 pm EDT on April 9, 2007

Based on his poor demonstrated skills in economics this dude should be looking for another line of work. Creative Writing appears to be a good match!

HJ, at 3:10 pm EDT on April 9, 2007

It’s a southern thing like the lottery that was to be used to better the school system here. SC is 49th out of 50th place in the USA and Goodlowe still has a job. It will never change because the rich people’s kids go to private and the poor kids go to public school. South Carolina needs a leader to make the school system work for all kids. But, no just keep people like this guy stealing money and keep Goodlowe working to make SC 50th place.

Sean, at 3:10 pm EDT on April 9, 2007

If I had any affiliaton with this institution whatsoever, I would be running — not walking — to a lawyer to sue every member of the entire board of trustees and the investment committee personally for gross negligence.

Steve, at 3:25 pm EDT on April 9, 2007

College Professors

You do not have to be a smart economics professor: you just have to make the Endowment Committee think that you are!

Dick Jacobs, at 4:25 pm EDT on April 9, 2007

I forgot :)

Dan, at 4:25 pm EDT on April 9, 2007

Looks like the only hope is for the hospital to cure him so that he can remember where the money is. They should get a nice reward for the cure. However, I bet the hospital will collect payment up front, less the treatment doesn’t work, and he can’t remember to pay his bill.

Eddie B., at 5:10 pm EDT on April 9, 2007

My recommendation

Tar & feathers....

Ray, at 6:15 pm EDT on April 9, 2007

Investors are to blame

It’s very hard to raise VC and investment money. I know; I’ve spent two years doing it. What kills me is that investors fell all over themselves to put money behind nothing, while avoiding legitimate business investments. I don’t feel sorry for the people that lost money at all — that’s just lousy investing. They should’ve done their homework.

Mr. Jones, at 6:16 pm EDT on April 9, 2007

134 million dollars is hard to forget about.

dennis, supervisor, at 6:20 pm EDT on April 9, 2007

maybe the dog ate it..

AJ, at 8:41 pm EDT on April 9, 2007

Come on... 30-40 % return?? First rule in investing: If it looks to good to be true then it probably isn’t true.This case is just another example.

hugh, at 8:45 pm EDT on April 9, 2007

how smart are our children?

With people like these in charge, are we surprized our children are comingup short?

Pat Spencer DUH I FORGOT! BUT I HAVE SOME SWAMP LANDFOR SELL DUH!

pat spencer, at 8:45 pm EDT on April 9, 2007

This is just like that time I forgot where I put my car keys...only instead of car keys it was $134,000,000.

(Patting all his pockets — “Hmm...where did I put that...and who am I?).

The Baptist sheeple get fleeced. “Promoting fiscal irresponsibility in a Christian environment.” Talk about putting all your Easter eggs in one basket...

Ok, I’ll stop now...sorry.

Forget-me-not, Car keys, at 9:35 pm EDT on April 9, 2007

Steve Martin’s two words to get you out of anything.

How much do you want to bet that the econ/con prof is old enough to remember the Steve Martin routine from the 1970’s and put it to use here, specifically... “Two simple words. Two simple words in the English language: “I forgot!” How many times do we let ourselves get into terrible situations because we don’t say “I forgot"? Let’s say you’re on trial for armed robbery. You say to the judge, “I forgot armed robbery was illegal.”http://snltranscripts.jt.org/77/77imono.phtml

Old Enough to Know Better, at 5:25 am EDT on April 10, 2007

Very sad, indeed, that CSU fell for this man’s scheme. Gross mismanagement of sacrificial gifts to the university. How could this happen? I pray for justice in this situation.

concerned southern baptist, at 6:16 am EDT on April 10, 2007

IF GOD DIDENT WANT US FLEECED ...HE WOULDENT HAVE MADE US SHEEP..

curt, at 5:11 pm EDT on April 10, 2007

Endowment Funds

This is an opportunity to remind viewers that perhaps endowment funds should be invested in perpetuity into a conservative long standing portfolio that has a proven track record even if the returns are modest.

Edwin Martinez del Rio, Associate Dean at Strayer University, at 5:35 pm EDT on April 10, 2007

Rest and calming relaxation should help!

He obviously is suffering enough already. He will remember, with time, and then we can ask where the money has been deposited. He needs rest and relaxation so his recovery is complete and he can get on with his duties as a teacher at the university.

There are great day/weekly spas in my area and wonderful resorts overseas that they should consider sending him to. He needs his space and quiet time to reflect on all of this and should not be stressed out 24/7! God bless.

Joe, Amnesia is Real, at 1:25 pm EDT on April 11, 2007

Old tricks, fresh victims

Sadly this is not the first time this tale is told, the players may change, but the moral of the story is always the same: if it sounds or looks to good to be true, it probably isn’t.

Rainmakers, miracle cures, you name it. Funny thing is that no one of this man peers seems to have noticed, or were too busy fleecing themselves (that is probably where the money went!)

It is a shame for everyone, including those who recommended this guy as an Economist!

Luis E, Asst Prof at Sabbatical Replacements, at 4:46 pm EDT on April 11, 2007

Insufficient Controls in Place

The University Board, and particularly the investment committee had an obligation to install controls on accounting and investments that would have prevented this disaster. It should not have been possible for this to happen, and wouldn’t have if the board and committee had done their job. Econo-conman himself should have been teaching that in his classes since it goes to basic economics. Also, it is not credible to believe amnesia would set in at the same time the money went missing. If you believe that, then I have an investment idea for you!

Silver Spork, at 5:50 pm EDT on May 8, 2007

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