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The Roanoke Times (Virginia)
November 9, 2013 Saturday
Metro Edition
Virginia; Pg. A1
794 words
30-month sentence for former treasurer
By Melissa Powell 381-8621

The former treasurer of Blacksburg High School's athletic booster club will spend 30 months in prison for taking more than $300,000 of club money, losing most of it through online trading, and spending a portion of it to pay personal bills.

Ricky W. Hayter, who was the chief financial officer for the Blacksburg High School Athletic Club, was sentenced Friday on one count of wire fraud in U.S. District Court in Roanoke.

The athletic booster club, formerly the Blacksburg High School Athletic Foundation, is a nonprofit organization, separate from the school system, that was set up years ago to support athletic teams and facilities.

Hayter volunteered in various capacities with the organization for nine years, according to court documents. As the chief financial officer, he was in charge of managing accounts that at one point held more than $700,000 raised for projects such as a new field house and artificial turf for the football field.

While about $350,000 of that money went to building the new field house, much of the remaining funds wound up in Hayter's hands.

Between January 2008 and June 2012, Hayter electronically transferred more than $300,000 in booster club funds into an online investment account that he opened in the club's name, according to testimony.

Two booster club members testified Friday that the organization was unaware of this activity.

According to court documents and testimony, Hayter lost more than $200,000 of the booster club's funds through unauthorized trades.

He also used the investment account to write about $50,000 worth of checks to himself and used the club's bank account to make payments to his personal credit card, including a $5,000 bill for new flooring in his home, according to testimony.

Booster club president Lynn Everett said that the remaining money was supposed to go toward artificial turf on the football field, but Hayter said he thought that the organization was a long way from having the necessary funds for that project. He said by transferring the money into the investment account, he thought he could help.

"It became very apparent that we were going to come up very short," Hayter said on Friday. "And I just tried to be a hero."

Hayter testified that no one told him he was prohibited from opening the TD Ameritrade account and pointed to the fact that foundation members had previously discussed investing the money.

But Assistant U.S. Attorney Daniel Bubar told the court that members had only discussed investing money in a safe, FDIC-insured account.

"Despite this, Hayter opened the TD Ameritrade account and made risky margin trades with the foundation's money without [members'] knowledge or authorization," Bubar wrote in a sentencing document filed earlier this month.

A grand jury charged Hayter with 10 counts of wire fraud after an investigation by the Virginia State Police and the U.S. Secret Service. As part of a plea agreement, Hayter pleaded guilty in August to one count related to a $3,000 transfer of booster club funds to his credit card.

At the beginning of the three-hour sentencing hearing Friday, Hayter's lawyer, Fay Spence, objected to a pre-sentence report that stated that the money transferred into the investment account was part of the amount lost in the fraud.

"What we conceive of as the scheme and what the government conceived of as the scheme are two different things," Spence said. "Opening the account was not part of the fraud; it was just horrendous judgment."

Spence said Hayter's use of booster club funds to pay his own bills was fraud, but the transferring of the money to the investment account was a "stupid, yet well-intentioned move."

Judge James Turk overruled her motion. Hayter "transferred money to an investment account without authority, he stole or took money from it, he conducted margin trading with it. ? I think it was part of the scheme," Turk said.

Before being sentenced, Hayter said that he was "very, very remorseful" and sorry for what he did. When asked by Turk why he took the money, Hayter said he didn't know.

"Things just got tight," he said. "And I just did it."

Turk ruled that Hayter will be placed on 36 months of supervised release after finishing his prison sentence. Hayter must make restitution to the booster club in the amount of $295,444.

Turk said he imposed a slightly lesser sentence than what was recommended in the pre-sentence report "because I want you to get out, earn some money and make restitution."

Everett said the club now has more members than it did before the incident and has received more donations. She said the new officers decided to change the organization's name in order to move forward and away from negative publicity.

"And we rewrote our bylaws to keep this from ever happening again," Everett said.

photo - Ricky W. Hayter - Was sentenced on one count of wire fraud.
November 10, 2013

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