“They think I’ve been running a Ponzi scheme...But Social Security is a Ponzi scheme. The Fed’s a Ponzi scheme.”
On the eve of the 2014-2015 college football season, a California university has sought judicial approval to remove or otherwise cover up the name of a recently-convicted Ponzi schemer prominently featured on the team's football scoreboard. California Polytechnic State University, San Luis Obispo ("Cal Poly") recently filed a motion in bankruptcy court seeking a court order to allow the modification of their football scoreboard, which currently prominently features Moriarty Enterprises - the entity used by Al Moriarti to mastermind a Ponzi scheme that duped investors out of at least $22 million. A hearing has been scheduled for September 19, 2014 - the day before Cal Poly is scheduled to host its home football opener.
Moriarty was a Grover Beach businessman who was well known in the community for his philanthropy, having donated extensively to area charities and also coaching various community sporting teams. Beginning in the early 1990's, Moriarty used his company, Moriarty Enterprises, to solicit potential investors with the promise of 10% returns purportedly derived from providing home loans to educators. While specifics on the investments remain unknown, Moriarty was able to raise tens of millions of dollars from dozens of investors.
While the investments initially performed as promised, Moriarty began defaulting on scheduled interest payments during the economic downturn due to what he blamed on financial headwinds. Investors increasingly pursued legal remedies, and Moriarty was facing 19 civil suits by November 2012. One month later, Moriarty filed for bankruptcy. After a criminal investigation, authorities arrested Moriarty in May 2013 and charged him with seven felonies including the fraudulent sale of securities and material misstatements and omissions in connection with the sale of securities. Moriarty pleaded no contest to the charges on August 4, 2014, and is scheduled to receive a five-year prison sentence on September 17, 2014.
Moriarty was known not only for his philanthropy, but also for his extensive ties to local and national athletics. His wife, Patricia Rooney, is part of the iconic family that owns the Pittsburgh Steelers. Moriarty played football at Cal Poly, and also previously coached local football and basketball teams. As a Cal Poly alumnus, Moriarty donated generously to his alma mater, This generosity included the donation of $625,000 in 2009 inechange for the prominent placement of Moriarty Enterprises on Cal Poly's football stadium.
Disputes Arise Over Naming Rights
Despite Moriarty's bankruptcy filing and subsequent arrest, the name "Moriarty Enterprises" still remained prominently featured on the scoreboard at Cal Poly's Alex G. Spanos Stadium. Indeed, because of his bankruptcy filing, the naming rights to the stadium were transferred to the bankruptcy trustee in an effort to realize potential value for creditors.
The school was well aware that any action taken to modify or remove the scoreboard could result in severe financial consequences - including punitive damages and the possibility of being held in contempt. After Cal Poly balked at repaying the $625,000 received from Moriarty, the trustee filed a lawsuit seeking the return of the funds and claiming that Moriarty was insolvent at the time the donation was made. In recent discussions between Cal Poly and the trustee, Cal Poly has asked for permission to cover the name with either "#CalPoly" or "Go Cal Poly" before the September 20th home opener, claiming that "having that company name on the scoreboard obviously is a problem for Cal Poly." In another potential alternative, Cal Poly has offered to assist with the sale of the naming rights to a disinterested third party.
A hearing on the motion is scheduled for September 19, 2014.