The former director of the Missouri State University bookstore pleaded guilty yesterday to embezzling roughly $1.2 million from the school.
The theft first became known to the public in
August, when MSU President Clif Smart held a news conference to announce that more than $81,000 in cash had been found in Brixey's desk, following a routine audit in which the school's internal auditors discovered more than $400,000 was unaccounted for at the bookstore during the past three years.
Additional lost funding was found during the subsequent criminal investigation.
The guilty plea was announced yesterday during an afternoon news conference at Hammons Tower conducted by Tammy Dickinson, U.S. attorney for the Western District of Missouri.
Mark Brixey, 48, of Ozark, admitted he engaged in a 10-year scheme to steal money from the university's textbook buyback program, according to a court filing. Brixey directed the bookstore from 1998 until his August resignation, and he began the scheme in 2003.
To accomplish the theft, Brixey said in his guilty plea he took advantage of dealings with companies that paid MSU for the right to purchase books from students and the university.
"He repeatedly abused his position and exploited the weaknesses of the university's accounting system," Dickinson said during the news conference.
Woodridge, Ill.-based Folett Educational Services had operated 10 buyback stations on the MSU campus during finals weeks in December and May each year. A representative with the company determined the amount of commissions to be paid to the school and gave checks directly to Brixey, making the payments in cash starting in 2011.
The university also disposed of surplus textbooks by reselling them to Folett, MBS Textbook Exchange Inc. and Nebraska Book Co., which gave checks to Brixey for the purpose of paying the school, according to the filing.
Brixey took these checks to the MSU bursar's office - which processes payments at the school - falsely claiming the money was needed to pay students for books purchased in the buyback program. Relying on his misrepresentations, the bursar's office paid cash to Brixey. Instead of recording the cash received in the accounting system of the MSU bookstore, Brixey pocketed the funds and used them for his personal benefit, according to the plea.
During the scheme, Brixey embezzled nearly $29,000 starting in 2003 and escalated the amount each year, stealing more than $190,000 during each of the last two full years of the scheme in 2010 and 2011. Before resigning from the university in August, he embezzled another $20,580 in 2012.
The guilty plea carries three counts: wire fraud, money laundering and filing a false tax return. Between 2009 and 2011, Brixey failed to report to the Internal Revenue Service $553,077 in income from the fraud scheme, resulting in a tax loss to the government of roughly $166,247 for those three years, according to the filing.
During the news conference yesterday, Smart spoke to the damage Brixey caused to the university.
"It's a staggering sum. I think the fact that $81,000 was found in his desk tells us the extent to which it had become so casual for him to apparently take this money and just leave it in his office," Smart said. "He did significant damage, in the short-term anyway, to the reputation of the university - people who trust us to properly account for funds."
Dickinson gave credit to MSU, which she said has corrected weaknesses in its accounting programs following the discovery of the theft and has fully cooperated with law enforcement.
"Thanks to MSU and their quick action, cooperation from local, state and federal agencies, the federal government was able to recover approximately $144,000 of the stolen funds in the form of certificates of deposit that Brixey had purchased that he must now forfeit to the government and which can be used to pay restitution to Missouri State University," she said.
Smart said in accordance with the
audit, the university has taken a number of corrective actions, including segregating duties of bookstore employees; adding new policies and eliminating exceptions to policies at the bursar's office; better recording transactions; and implementing more efficient oversight.
"No matter how good your controls are, if people want to steal from you, they can sometimes find that weak area, and then the lesson is to vigorously prosecute them as an example and a lesson to others to discourage that type of action in the future," Smart said. "We believe we have established a comprehensive set of actions to close any loopholes for the future."
Smart said that through a $1 million insurance policy and collection of restitution, the school should be able to recover nearly the full amount stolen. He noted the university's internal auditors are conducting a second audit of the entire bookstore, which should be available to the public within the next several weeks.
Under federal statutes, Brixey could face a federal prison sentence of up to 43 years without parole, plus a fine and a restitution order. Brixey is required to pay the government $1.2 million, representing the proceeds of the wire fraud scheme and certificates of deposit purchased with proceeds of the fraud scheme. A sentencing hearing will be scheduled following the presentence investigation by the U.S. Probation Office.
The case is being prosecuted by Supervisory Assistant U.S. Attorney Michael S. Oliver. It was investigated by the U.S. Secret Service, IRS-Criminal Investigation, the Springfield Police Department and the Greene County prosecuting attorney.[[In-content Ad]]
