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Baseball gift may be returned

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By Nora Caplan-Bricker, Vivian Yee

Wednesday, September 1, 2010

Yale baseball donor John Mazzuto 70 is in jail, facing charges of financial conspiracy and fraud.Now, representatives of the company Mazzuto formerly headed say Yale is considering returning his

$1.7 million gift.

Industrial Enterprises of America, the company Mazzuto headed from 2004 to 2008 and whoseaccounts he allegedly falsified, is climbing out of bankruptcy. When the company asked Yale toreturn Mazzutos donation last October, University President Richard Levin said Yale wouldinvestigate the gift and do whatever is the right thing. Ever since, Yale and IEAM have not beenable to agree on what that would be; the University declined to return Mazzutos gift for severalmonths, with administrators saying he was innocent until proven guilty.

But with Mazzuto in jail, a lawyer for IEAM said, things have changed.

In light of the indictment, Yale now knows for sure that they received stolen money, said StevenThomas of the Santa Monica, Calif.-based law firm Thomas, Alexander & Forrester, whichrepresents IEAM. The victims deserve their money back.

Levin and General Counsel Dorothy Robinson declined to comment.

After months of negotiations between IEAMs new management and the Universitys legal counselfailed in early April, Thomas said he was prepared to sue Yale over fMazzutos donation. IEAM andfederal prosecutors claim Mazzuto gave Yale shares of illegally-issued stock.

But the day Thomas planned to file a lawsuit, he said, the University told him it was considering

returning the gift, which paid to endow the head baseball coaching position and build a baseballpractice facility.

A year of federal investigation into alleged insider trading and accounting fraud culminated May 24when federal officers arrested Mazzuto at his home in Palm Beach Gardens, Fla. Since then, Mazzutohas been held at Rikers Island in New York as he awaits pre-trial hearings. With his assets frozen, hehas not posted $900,000 cash bail.

Along with James Marguiles, Mazzutos alleged co-conspirator at IEAM and other companies,

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Mazzuto was arraigned in criminal court in New York City Aug. 11. Both men have been chargedwith conspiracy, grand larceny, fraud and falsifying business records in a 57-count indictment thatincludes stealing more than $60 million from their corporation and its investors. Vice President forDevelopment Inge Reichenbach said Wednesday that Yale has cooperated with the federalinvestigation.

As the investgation continues, authorities may ask one former Yale employee to return stock heaccepted from Mazzuto. Bob Renck, the current CEO of IEAM, said Mazzuto gave at least one Yaleemployee illegal stock in August 2007, around the time he made his gift to the Universitys baseballprogram. The stock was issued through the companys employee stock option program to someonewho was not an IEAM employee, Renck said. Mazzuto and his associates frequently abused thisprogram to give money to their friends and take it for themselves, he said.

Sources close to the investigation say the recipient is William Asermely 93, a former assistantbaseball coach at Yale who worked extensively with Mazzuto to secure and design a use for hisdonation, as the recipient. Asermely did not respond to three calls seeking comment.

Building a new indoor baseball facility was Asermelys brainchild, according to a fall 2007 Yalebaseball newsletter. Though the indoor facility was never built, Asermely continued to play animportant role in the plans for an outdoor field.

Asermely, who was in Pierson College and was captain of the baseball team when it won an IvyLeague championship in 1993, played for the Baltimore Orioles after graduating. He was promotedto associate head coach of the baseball team in January 2008, after eight years as an assistant coach.But he left Yale in the same year, and is now the director of the Providence, R.I.-based NortheastBaseball School, which holds baseball clinics and lessons for children and teenagers.

J. Frederick Berg 66, another Yale baseball donor and a friend of Asermely, said Asermely left Yaleto find another way of supporting his wife and newborn twin sons.

Bills a loyal Yale alumnus, he said.

Renck said some of the money missing from IEAMs books is still unaccounted for, and he will notknow if more than one person affiliated with Yale received illegal cash or stock until he finishes hisinvestigation.

Robinson declined to comment on whether Yale has conducted an investigation of its employeessince Mazzutos alleged fraud was uncovered to determine if any might have privately received stockfrom him. She also declined to comment on the circumstances of Asermelys departure from theUniversity.

More like this story

Baseball gift going to court Company asks for donors money back Donor faces scrutiny Donors researched, not vetted Expelled student arrested again


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9/1/2010http://www yaledailynews com/news/2010/sep/01/baseball-gift-may-be-returned/

Pressure on Yale to Return Ill-Gotten Gains Builds

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