The University of Louisville and the University of Louisville Foundation filed suit today against former President James Ramsey and other former Foundation officials alleging breach of fiduciary duty, fraudulent appropriations and improper diversion of funds for personal gain.
The suit filed in Jefferson Circuit Court claims that during the period from 2008 to 2016, Ramsey and others conspired to divert millions of dollars from the Foundation’s endowment into speculative and unauthorized ventures, putting the Foundation at risk. The suit further charges that these individuals depleted the endowment through complicated – and often unauthorized – transactions designed to avoid scrutiny and circumvent the Foundation’s approved rules and annual budget.
The suit also claims that Ramsey and his chief of staff, Kathleen McDaniel Smith, colluded to pay excessive compensation to themselves and others. It further states that they intentionally concealed the improper expenditures and compensation, and that their actions caused the Foundation to lose millions of dollars.
Also named in the suit are former finance officers Michael Curtin and Jason Tomlinson; former Foundation Chair Burt Deutsch; and law firm Stites & Harbison, which served as the Foundation’s legal counsel.
“Millions of dollars of donations originally intended for the benefit of the University and its students instead were used to pay excessive compensation,” said UofL Trustees Chair David Grissom. “Other funds were directed toward risky and inappropriate investments, and spending regularly exceeded the Foundation’s own policy.”
“We have implemented new controls at the Foundation to insure this never happens again,” said UofL Foundation Chair Earl Reed. “Now it is time to turn this mess over to the lawyers for clean-up, while the rest of us focus on turning a new page at UofL and the start of an exciting chapter of growth and excellence. We owe it to our students, the Cardinal Nation and our generous donors to hold these individuals accountable and to recover as much of the misspent funds as possible.”