$2.47 million Lehigh frat scam means jail for 78-year-old

After bilking Lehigh University fraternities and sororities of $2.47 million via a business managing their money, 78-year-old Albert Fisher may spend the rest of his life in prison.  Lehigh University students scammed out of money got...

$2.47 million Lehigh frat scam means jail for 78-year-old

After bilking Lehigh University fraternities and sororities of $2.47 million via a business managing their money, 78-year-old Albert Fisher may spend the rest of his life in prison. 

Lehigh University students scammed out of money got some justice Wednesday. lehighvalleylive.com file photo 

Wednesday afternoon Fisher, formerly of Quakertown, was sentenced by U.S. District Judge Joseph F. Leeson Jr. to 36 months in prison followed by three years of probation.  

"Your breech of the trust those students placed in you was total and complete," Leeson said.

Fisher must pay $2.47 million in restitution to the affected Lehigh groups as well as $205,000 to the I.R.S. Although it is unlikely much of that money will be recovered.

"Respectfully, he does not have two nickels to scratch together," Assistant U.S. Attorney John Gallagher said.

Fisher, who appeared in court Wednesday in a wheelchair and used an oxygen tank to help him breathe, pleaded guilty in October to seven counts, including wire fraud and submitting false tax returns.

Fisher and his late-wife, Elizabeth "Betty" Fisher operated the now-closed Fraternity Management Association in Bethlehem, a company that handled finances and billings for 13 fraternities and two sororities at Lehigh as well as the Panhellenic Council and Interfraternity Council.

Fisher, who was business administrator/director, committed suicide after an investigation began.

Defense attorney George Heitczman argued for probation and house arrest because of Fisher's age and his failing health. He has congestive heart failure and diabetes.

"His time is short and I hope the court will take that into account," Heitczman said. "...His wife is gone, his health is gone and his life is ebbing away."

Gallagher argued for a prison sentence but did request Leeson impose one less than the minimum sentencing guideline.

Ultimately, Leeson said he took into account both the magnitude of the theft and the impact it had on many students and their families.

"The fraud that you perpetuated spanned multiple years," Leeson said.

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After the hearing, Gallagher said Leeson appropriately weighed the seriousness of the crime with Fisher's exemplary conduct for much of his life. He noted he is an Army veteran, former Bethlehem Steel employee and father.

"This isn't a case where you are chest beating when it is done," Gallagher said. "There's a lot of loss and tragedy on both sides."

Fisher apologized to the court and his victims, acknowledging no words could undo the harm he had caused. He maintains that he did not set out intending to mismanage the Fraternity Management Association's finances or steal any money.

There were issues with the business they tried to fix, he said. The Fishers eventually commingled their own money, spending all of his wife's retirement funds and borrowing money from family to put into the company, Fisher said.

"I have tried to leave a respectable life up to this point," he said, later adding, "I am heartily sorry."

From 2009-2014, the company collected money to pay for food, food services and upkeep of fraternity and sorority houses. It also escrowed money to pay for events and new furniture.

During this time, the Fishers misappropriated at least $1.4 million from the Bahsegel company by creating a fake consulting company and paying Albert Fisher as both a full-time employee and consultant.

The prosecution agreed the Fishers did put their own money back into the business. But they also racked up hefty American Express bills charging trips, jewelry furniture and men's luxury clothing onto Fisher's personal card and then paying it off with money from the company, Gallagher said.

And Fisher inflated the hours he worked for the company. In January 2012, for instance, he was paid the equivalent of 35 hours of work each day in a 31-day month.

Fisher also failed to claim $614,398 in income on his tax returns from 2009 to 2013.

Once the company collapsed in 2014, the Greek organizations and other victims, including the university, had to pay for expenses they thought the company had already paid, totaling close to $1 million.

By the time the fraud surfaced, Fraternity Management Association had less than $3,000 spread across several bank accounts.

Many fraternities and sororities had to shut down their kitchens halfway through the school year and layoff cooks, according to testimony Thursday. Some vendors still have not been paid.

Gary Tilles, who became the acting director of Fraternity Management after its collapse in March 2014, spoke on behalf of the victims in the case Thursday.

He believes the Fishers were running a Ponzi scheme, keeping the company afloat to hide their misappropriations.They were not indigent, he said.

Between his pension and Social Security, Albert Fisher was collecting about $4,000 a month and the couple was being paid about $100,000 a year, he said. They charged six cell phones and car expenses to the company.

"The spending by these people," Tilles said. "It is just hard to fathom."

He noted that the couple allowed the company's $2 million insurance policy to lapse in 2013 because they did not have a $5,000 premium payment. Yet at the same time, they were sending money to their children, Tilles said.

"The Fishers turned this into their family piggy bank," Tilles said.

The court also heard from some of Fisher's loved ones.

His son-in-law Brian Andrew said that Fisher has lived with the family since his arrest. He's twice been hospitalized with congestive heart failure and pneumonia and is not a flight risk, he said. Andrew said it was hard to listen to how the kind, compassionate man was being described in court Thursday.

"He is an asset to our family," Andrew said, adding he has the patience of Job helping his grandchildren with homework.

Both Tilles and Heitczman noted that Fraternity Management Association has filed a civil suit in Northampton County Court of Common Pleas against Fisher and other defendants.

Fisher is scheduled to turn himself in April 27.

Sara K. Satullo may be reached at ssatullo@lehighvalleylive.com. Follow her on Twitter @sarasatullo and Facebook. Find lehighvalleylive.com on Facebook.

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