Former MSU bookstore manager sentenced to five years in prison for embezzling $1.1 million

(From the U. S. Attorney for the Western District of Missouri)

 Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that the former manager of the Missouri State University bookstore was sentenced in federal court today for embezzling more than $1.1 million by pocketing the money from the school’s textbook buyback program.

Mark Brixey, 48, of Ozark, Mo., was sentenced by U.S. District Judge Gary A. Fenner to five years and three months in federal prison without parole. The court also ordered Brixey to pay $1,329,484 in total restitution to his victims, including $163,237 to Missouri State University, $166,247 to the Internal Revenue Service and $1 million to Zurich American Insurance Company.

On March 26, 2013, Brixey pleaded guilty to wire fraud, money laundering and filing a false tax return. Brixey, the manager of the MSU bookstore from 1998 to August 2012, admitted that he embezzled $1,163,237 from the student textbook buy-back program.

Brixey’s 10-year fraud scheme began in 2003 with the theft of nearly $29,000 and escalated each year, with more than $190,000 stolen during each of the last two full years of the scheme in 2010 and 2011. Brixey embezzled another $20,580 before he resigned in 2012.

Textbook Buyback Scheme

As manager of the MSU bookstore, Brixey handled all contacts related to the textbook buy-back program. At the close of each semester, MSU students had the opportunity to sell their used textbooks to Follett Educational Services, which contracted with MSU to administer the book buy-back program. Follett operated 10 textbook buy-back stations on the MSU campus during finals week in December and May of each year.

On the last day of each buy-back period, a Follett representative prepared a report that detailed how many textbooks were purchased and at what price. A Follett representative also calculated the commissions to be paid to MSU for allowing Follett to conduct the textbook buy-back program at the university.  A Follett representative gave a sight draft/check to Brixey for payment of the commission to MSU (beginning in 2011, the Follett representative paid the commission in cash directly to Brixey).

Follett also purchased textbooks that were no longer used by MSU professors directly from the MSU bookstore. Similar to the textbook buy-back program, a Follett representative calculated the total amount to be paid to MSU for these books and gave a sight draft/check to Brixey. The bookstore also disposed of surplus textbooks by reselling them to textbook wholesalers, such as MBS Textbook Exchange, Inc., and Nebraska Book Company.

When Brixey received sight drafts/checks payable to MSU for these buy-back programs, he took those checks to the MSU bursar’s office. Brixey falsely claimed that the sight drafts/checks were needed to pay students for books purchased in the buy-back program. The bursar’s office relied upon Brixey’s misrepresentations and provided cash to Brixey.

Brixey did not record the cash received in the MSU Bookstore accounting system, but instead used the cash for his personal benefit.

Count One: Wire Fraud

Brixey admitted that he executed the scheme to cause electronic transmissions related to the processing of sight drafts (in connection with the commissions and the purchase of textbooks).

Count Two: Money Laundering

Brixey admitted that he concealed his fraud scheme by disguising the proceeds through multiple financial transactions. Brixey routinely deposited the proceeds of his fraud scheme into Educational Credit Union accounts then transferred cash from those accounts to purchase and add value to certificates of deposit. Between Jan. 11, 2008, and July 16, 2012, Brixey made or caused to be made 55 transfers totaling $121,000 from Education Credit Union deposit accounts to Educational Credit Union certificates of deposit.

Count Three: Filing a False Tax Return

Brixey admitted that on April 15, 2011, he filed a tax return that failed to report approximately $194,521 in income received through the fraud scheme in 2010. Brixey also filed a tax return for 2011 that failed to report $192,202 of income from his fraud scheme and a tax return for 2009 that failed to report $166,354 of income from his fraud scheme.

Between 2009 and 2011, Brixey failed to report a total of $553,077 of income from his fraud scheme, resulting in a tax loss to the government of approximately $166,247 for those three years.

This case was prosecuted by Supervisory Assistant U.S. Attorney Michael S. Oliver. It was investigated by the U.S. Secret Service, IRS-Criminal Investigation, the Springfield, Mo., Police Department and the Greene County, Mo., Prosecuting Attorney.