Charleston Southern U. Says It Lost $10-Million in Economics Professor's Swindle

Federal authorities have accused a locally prominent economics professor at Charleston Southern University of fraud, alleging that he bilked about 300 investors through three investment companies he runs. His college is among those that say they lost money, and it has sued the professor, his wife, and their companies, claiming a loss of $10-million.

Meanwhile, the professor, Albert E. Parish Jr., has reportedly been hospitalized, after telling acquaintances that he had amnesia, according to a report in The Post and Courier, a newspaper in Charleston.

University officials could not be reached for comment on Friday, as the institution appears to have been closed for the Good Friday holiday.

The newspaper reported that in Charleston Southern's lawsuit, filed on Thursday, the university said it had given Mr. Parish $10-million to invest over the past five years, relying on his "oral representation and alleged expertise."

The amount of the university's claimed loss is equal to about one-quarter of its annual operating budget. The Baptist institution enrolls about 2,500 undergraduates and 300 master's-level students. The current value of its endowment, if any, could not be determined on Friday. But as of 2003, it was worth about $10.6-million.

Mr. Parish, who also directs the university's Center for Economic Forecasting, could not be reached for comment at several numbers found for him, including those listed on a Web site for one of his companies, Parish Economics LLC. (The Web site does include a caricature of Mr. Parish, showing him as a superhero cartoon character called "Economan.")

The Post and Courier, where Mr. Parish, 49, sometimes published a column, described the South Carolina native as a "local whiz kid" who was well known in the community for the investing tips he would give out in local speeches and for the economic forecasts he gave regularly to the Charleston Area Metro Chamber of Commerce.

Through the forecasting center, a joint project between the university and the chamber, Mr. Parish also commented on national economic trends. (His latest prediction, updated on March 29 on the center's Web site, which appears to have been taken down over the weekend, said that "over all the forecast is pretty good for 2007.")

According to a civil-fraud lawsuit filed by the Securities and Exchange Commission in the federal district court in Charleston, Mr. Parish, Parish Economics, and a third company he owned -- Summerville Hard Assets LLC -- have been "grossly misrepresenting investors' returns and assets" since at least January 2005.

The SEC complaint, which cites five counts of fraud, says Mr. Parish and Parish Economics, which began operating investment funds in 1986, lied to investors about rates of returns on investments "to lure new investors to the funds and to lull those already invested into a sense of security."

The lawsuit says that the funds purported to have assets of about $134-million but that, "without disclosure to the investors, virtually all of the assets of the funds have been dissipated."

written by:
Mary Torretta
Editor-in-Chief, 2007-2008
Federal Circuit Bar Journal