Two former leaders of UW Oshkosh were charged Thursday in a Winnebago County court with five felonies for misconduct in office. They now each face up to 17 and a half years in prison.
Former UW Oshkosh Chancellor Richard Wells and former Vice Chancellor Tom Sonnleitner are accused of making illegal deals to finance campus building projects, like an alumni welcome center, sports complex and hotel.
Wells and Sonnleitner allegedly concealed millions of dollars in improper financial transfers to the non-profit University of Wisconsin Oshkosh (UWO) Foundation to help execute the projects.
The UW System filed a lawsuit against Wells and Sonnleitner more than a year ago, claiming they funneled $11 million in taxpayer money into the projects, and wrote a series of letters to various banks, assuring them if the UWO Foundation was unable to make bond payments, the University would help out.
The UWO Foundation went bankrupt last year because of the projects, creating 14.5 million dollars in debt for the UW System and State of Wisconsin.
One of the banks that lent money - Bank First National - is now suing the UW System to force the state to make payments.
The UW System Board of Regents took an unprecedented step last year by asking the state Department of Justice (DOJ) to pursue civil and criminal charges against Wells and Sonnleitner.
"We are working diligently to rebuild confidence in our institutions and to improve the transparency of foundation transactions" says Michael Grebe, the Regents Audit Committee Chair, in a statement Thursday.
The attorneys for Wells and Sonnleitner declined to comment about the criminal case. They will both make their initial court appearance on June 11th.
While the bankruptcy of the UWO Foundation does not impact tuition or budget cuts, it could impact student recruitment because the foundation has no money left to create any new student scholarships.