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Tuesday, July 22, 2014

Federal judge arraigns 4 in KU ticket scandal

BY RON SYLVESTER
The Wichita Eagle

Four people accused of stealing more than $3 million in University of Kansas athletic tickets faced a federal judge for the first time Wednesday.

Another woman charged in the scheme indicated she would plead guilty when she comes to court next month.

U.S. Magistrate Judge Ken Gale arraigned the former KU ticket office director, her husband and two chief fundraisers on a charge of conspiracy to commit wire fraud.

Charlette Blubaugh, 44, Thomas Ray Blubaugh, 46, Rodney Jones, 42, and Ben Kirtland, 54, pleaded not guilty.

But as Gale explained, that was the only plea he could accept at the initial hearing. Pleas other than not guilty in felony cases are usually handled by district judges, not magistrates, who have limited authority.

That may be the case with a fifth defendant, Kassie Liebsch, 28, who postponed her initial appearance Wednesday.

Through her attorney, David Bell of Kansas City, Mo., Liebsch filed a notice to change her plea on Jan. 21 before U.S. Senior District Judge Wesley Brown.

After working as a system analyst under Charlette Blubaugh, Liebsch later became director of the ticket office. Liebsch resigned before a federal grand jury indicted her last month.

Gale released the other four on their own recognizance and had them sign a $25,000 bond, which they will pay if they fail to show up for subsequent court hearings or do not follow conditions set by the judge.

All four surrendered their passports.

The case now goes to Brown, a 1933 graduate of KU's Law School, who will schedule further proceedings.

Prosecutors say the five earned up to $5 million from the ticket scheme, first reported by the Kansas City Star and documented by the university in an internal report released in May.

They are charged with stealing athletic tickets and scalping them for cash to ticket brokers and other third parties outside the university.

According to the indictment:

The scheme began in 2005 when Charlette Blubaugh began skimming tickets and giving them to the others, who would funnel the tickets for resale. When those tickets were sold on the Internet, that set up the wire fraud charge.

Kirtland and Jones were the top two officials in the Williams Educational Fund, which is the fundraising arm for the athletic department.

While his wife ran the ticket office, Thomas Blubaugh was paid $115,000 in consulting fees for 2 1/2 years.

The indictment also says those charged assured former athletic director Lew Perkins that they had security measures built into the computer system to make sure tickets couldn't be stolen.

Perkins, who is not charged in the indictment, hired or promoted all of the indicted parties. Perkins left KU after weathering controversies involving the ticket scandal, his multimillion-dollar pay package and a state ethics investigation.

Two other former employees, Jason Jeffries and Brandon Simmons, have pleaded guilty to related charges in exchange for their cooperation in the investigation.

KU Ticket Indictment

Contributing: The Kansas City Star. Reach Ron Sylvester at 316-268-6514 or rsylvester@wichitaeagle.com.

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