LUBBOCK, TX (KCBD) - NewsChannel 11 has learned that Texas Tech is the victim of a nationwide Ponzi scheme.
You might recall New York Investment Manager Bernard Madoff is now serving prison time after being found guilty for bilking billions of dollars from investors. Texas Tech is among his many victims.
Texas Tech Vice Chancellor Jim Brunjes says the university invested with a man named Ezra Merkin. Merkin then invested billions of dollars of university funds from all over the nation with Madoff's fund. Texas Tech has not alleged that Merkin knew the true nature of Madoff's fund.
Brunjes says not all of the Texas Tech investment went to Madoff. He thinks Tech's loss might be $4 to 5 million. That's a very small percentage of the school's overall endowment which is in excess of $700 million. Brunjes says Tech invested with Merkin on the advice of a St. Louis based company called Hammond & Associates.
According to an official Board of Regents agenda, on Thursday and Friday Texas Tech Regents will consider hiring an outside lawyer to sue Merkin. The agenda also indicates that regents be asked by staff if Hammond & Associates should be sued as well.
NewsChannel 11 was unable to reach Hammond & Associates by phone after getting information early Wednesday evening from Texas Tech. Hammond says in a previous written statement that they have no connection to Madoff.
Right now Tech cannot recover any of the Merkin fund because of a court ordered injunction. New York University and the New York Attorney General both sued Merkin. Merkin's attorney was quoted as saying the NYU lawsuit has no merit.
Texas Tech wants to emphasize that only $4 to 5 million is at risk.
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