Friday, July 15

FRAUD? PSU Paid Freeh $260K for 1st Claim

Recent documents show that not only did PSU fail to properly vet claims, but it also very likely attempted to use their insurance coverage to pay for Freeh's phony investigation

Ray Blehar

Penn State University paid $260,626.31 to Louis Freeh for work allegedly done with regard to the first claim made by John Doe A

Exhibit G of the most recent document dump confirms that an October 2013 Penn State University (PSU) letter (at 7) asked that the Pennsylvania Manufacturer's Association Insurance Company (PMA) reimburse PSU for the settlement amount, alleged investigative work done by Louis Freeh, and the negotiations conducted by Feinberg Rozen. 

PSU paid the claimant $1.25 million and the Maytag men of Feinberg Rozen picked up $29,788.12 for their "work."

PMA eventually rejected PSU's request for reimbursement based on its 1992 insurance policy's sexual molestation exclusion.  

No Work By Freeh
While PSU alumni and followers were recently appalled to hear that the University  paid around $93 million for unvetted claims, it is even more disturbing to think that PSU tried to fraudulently pay Louis Freeh out of this boondoggle.

According to the timeline of the settlements, John Doe A filed suit on November 30th, 2011 and that PSU submitted its coverage claim to PMA on January 6, 2012.   On January 30th, PMA notified PSU it was not entitled to coverage.

That means Freeh was on the job for about seven weeks -- including Thanksgiving, Christmas, and New Years holidays -- when his firm allegedly racked up $260K of investigative and risk reduction services.

Yeah, right.

According to a detailed analysis of the Freeh Report, the investigative activities in November were mostly interviews and background information provided by then-PSU General Counsel Cynthia Baldwin.

December investigative activities shifted to the football program, discipline related to football through interviews with student affairs, and investigation into possible NCAA violations. 

According to documents in the Corman case, Freeh's team was involved in setting up meetings with the NCAA and Big Ten at this time. 

It appears that investigative activities ceased around December 19th.  It is notable that on December 19th, the Freeh group interviewed officials in charge of football sports camps, who informed the investigators of Joe Paterno's lack of involvement in the football camps (Freeh Report at 36).

In early January, Freeh's team met with the NCAA and then followed up with PSU Athletic Department officials on January 10th.  On January 12th, they began looking at Sandusky's retirement benefits then moved on to investigating the Clery Act.

Finally, Exhibit Z (at 63) of the lawsuit contained a summary of a February 16, 2012 discussion written by PSU's Risk Officer Gary Langsdale. The document noted that PSU had no idea what Louis Freeh's group had gathered that might be available for discovery in the case. 

The available evidence reveals that Freeh's team did no work in conjunction with the John Doe A lawsuit during the time PSU was negotiating with PMA and provided no materials to the University related to the lawsuit (as of February 16, 2012).   As such, it appears PSU attempted to fraudulently bill PMA for Freeh's work that was unrelated to the pending lawsuit.

If this isn't malfeasance, I don't know what is.


  1. It is truly incredible that Penn State would think they could dupe an insurance company into paying for part of the Freeh Report.

    Maybe the insurance company will subpoena Freeh to testify. If they did I bet Penn State would drop the request for reimbursement for Freeh's alleged work just to keep him from testifying.

    I hope the insurance company wins. Penn State did the wrong thing by not allowing the insurance company to handle the claims, for paying claims way beyond the statute of limitations when they had no legal liabilty, for paying obviously fraudulent claims and for not vetting many of the claims.

  2. Desperation is the keyword here. It makes people do incredibly stupid things. And in this case the obvious stupid things are, trying to frame innocent people, and using other people's money to commit insurance fraud. But what could be so worthy of risking everything to cover up? All of this university money, millions upon millions unethically and illegally thrown at this Second Mile pedophile scandal, but why? Because it becomes the PSU football scandal and the Joe Paterno scandal instead of the Second Mile, Arrow Ministries, Diocese, Thousand points of Light, Merck, Louis Freeh, PA government, pedophile ring. All of these people that have persecuted and are persecuting Kathleen Kane and Joe Paterno, mainstream media included, are involved in, or beholden to, this organized sexual abuse of our children. They are nothing short of a trapped pit of vipers. Spewing their venom at their enemies that are now looking down at them from the edge of the pit.

  3. I don't know why you name Attorney General Kane right next to Paterno in this. Kane continued the unwarranted case against Curley, Schultz and Spanier when she could have ended it long ago.

    She never investigated Second Mile. She softballed the report on her investigation of Corbett's investigation of Sandusky.

    She didn't open an investigation into massive failures of the trustees in their fiduciary duties, which have cost the university well over $100 million.

    1. Tim, you make a good point. Perhaps being a "newbie", Kane trusted some of the wrong people and their advice? Maybe all of the corrupt media stories about her "political" motives for her investigations slowed her down? I want to trust her, but yes it seems she could have done a lot more for the PSU 3 than she did.

      See below I've made an observation about Kane AGAIN being surrounded by possible saboteurs. Maybe Ray can give us some insight into this.

    2. Tim, all red herrings. At each mention of Spanier's crimes, you try to deflect attention to others just as Spanier has done with his never ending PR campaign. Spanier was warned repeatedly about Sandusky and did nothing. What others should have done does not absolve Spanier of anything.

  4. Ray, what's your opinion of Bruce Castor delaying the Gansler report? Do you accept his reason for the delay as being truthful? Or do you think there's a possibility that the delay is facilitating backroom deals to remove certain names from the list of porn e-mail offenders? I know I would not have brought Castor on the Attorney General's team as the Solicitor General. I don't trust him as far as I could throw him! Many years ago, his glowing, almost gushing public appraisals of Risa Vetri Ferman were sickening. And I believe she and her family are caught up in organized crime. If I'm right, then Castor has known all along what master she serves. And his delaying of Kane's Gansler report would allow time to "clean up" the report and publish more false narratives about Paterno and Kane.

    So it seems possible that Castor is protecting Vetri Ferman and her ilk. And meanwhile it's "look over here at Joe Paterno", and "look over here at Cosby", and "look over here at Kathleen Kane".

    1. An adjunct to Ockham's Razor states that you should not try to develop theories for things which are easily explained by incompetence and ineptitude. Kane was in over her head. She fell into Frank Fina's boobie trap and swallowed the poison pill. Did you know that the attorney that Fina made a deal with (Ali immunity) is representing him in his suit against Kane? Birds of a feather tend to congregate in the same spot.

    2. Gregory,
      Occam's Razor is what the PA Corruption Network depends on to fool the public. Don't be fooled -- Frank Fina is a bit player in a larger network of corrupt individuals.

      Many people believed (and some still believe) the decisions made by the PSU trustees to fire Joe, accept the Freeh Report, accept NCAA sanctions, then pay out $93 million in settlements was driven by panic and incompetency.

      That's simply not possible, given that the people who made these decisions are as financially savvy as they come.

      As far as Kane goes, she really did not realize what she was going up against when she tried to clean up the mess in Pennsylvania. As the evidence shows, it involves judges, district attorneys, and federal prosecutors -- and well as a bevy of politicos.

  5. In reality, applying Ockam's Razor to this mess leads to one conclusion....FRAUD.