Sun Dome naming deal off

A company backs out when its founder's past is revealed.

By JEFF TESTERMAN
Published July 18, 2007

TAMPA - A student loan company withdrew from a multimillion-dollar naming-rights deal for the University of South Florida's Sun Dome on Tuesday as questions continued to dog its chief executive about his criminal background.

Academic Financial Services, a 275-employee Tampa firm founded by Wayne Morgan, backed out of a deal to put its name on the university's arena and provide up to $2.99-million to USF over five years.

"In light of the controversy and the animosity that has come up, we regretfully have decided not to pursue the naming rights with the Sun Dome any longer," said Academic Financial's public relations director Christina Barry. "We love USF, and we will continue scholarships and other programs there, but we don't want to cause any problems in the community."

The naming-rights deal was brokered by Action Sports Media, a Tennessee firm that won the rights to award a contract after providing $1.8-million in video scoreboards to USF. But because of the scrutiny of corruption in student loan companies nationwide, USF officials balked at signing Academic Financial.

"Under the circumstances, I applaud their decision, but this has never been about AFS or Mr. Morgan," said Steven Oscher, president of Sun Dome Inc., which manages the arena. "Our concerns have always been about the student loan industry and the implications about the university and the Sun Dome."

Tuesday evening's announcement appeared to surprise Action Sports Media, which stood to gain 30 percent of the revenue from the naming-rights deal. Jerry Felix, Action Sports' chief financial officer, said he was unaware of the decision and could not comment.

The withdrawal came shortly after Morgan was fielding new questions from the St. Petersburg Times about his background and his company.

Morgan was accused by three top officers last year of misappropriating $2.58-million of the company's assets for personal use, according to a shareholder lawsuit.

The suit says Morgan bought real estate, a luxury home gym, an all-terrain vehicle racetrack, a swimming pool and vacations with company money, then directed his bookkeeper to mischaracterize the purchases as shareholder advances.

Morgan also concealed his criminal past on a Hillsborough court petition to change his name in 2003, a year before he started his student loan business, apparently giving false information under oath.

In a petition to change his name to Zachery Wayne Morgan from Roger Wayne Morgan, he cited just one felony conviction, an $18,513 worthless-check charge in 2002 in Tampa that led to a violation of probation when he failed to make restitution payments.

But North Carolina records show Morgan was also convicted in 1994 of safecracking, larceny and breaking and entering - all felonies. Morgan never followed through with the name change, but he signed the petition under oath, attesting that he understood "the punishment for knowingly making a false statement includes fines and/or imprisonment."

Tuesday, Morgan denied misappropriating company funds, said he couldn't remember what he had put down on the name-change petition and bridled at criticism he has received after receiving the naming rights on the Sun Dome.

"I've made some poor decisions in the past, and I've paid for them," said Morgan, 36, who has spent lavishly on sports sponsorships for Tampa Bay's Lightning, Devil Rays and Buccaneers. "Now, I don't even spit on the sidewalk if I'm going to get in trouble.

"I was trying to help the d--- Sun Dome. It needs an overhaul. I was trying to do some good."

Tuesday, the St. Petersburg Times also obtained records showing the U.S. Department of Labor opened an investigation into reports of irregularities involving 401k payroll deductions at Academic Financial Services in 2006.

One complaint was brought by Bill Russell, 59, a former call-center supervisor at Morgan's student loan company, according to a letter from Labor Department investigators. Russell kept pay stubs showing he contributed more than $3,000 to his 401(k) retirement account, then received an account statement showing a balance of $418.

When he questioned the whereabouts of his 401(k) money, Russell said he was fired.

"I called the Labor Department because I considered this was just stealing," Russell said.

Meanwhile, the shareholder suit brought against Morgan and Academic Financial's parent company, Business Financial Solutions, makes other allegations of financial improprieties. Suing were former chief financial officer Michael Murray, former marketing director Matthew Steingraber and his wife, Danielle Steingraber, the former personnel director, who were recruited by Morgan to run the fledgling student loan company in 2004.

Their suit says that more than 500 payroll checks bounced while Morgan was spending $50,000 for artwork in executive offices at 5463 W Waters Ave., $100,000 for an interior designer to redecorate the executive conference room, $45,000 for company trips to Colorado and the Bahamas, and $15,000 to reserve Adventure Island for a company outing.

Morgan also put his wife on the payroll at $46,800 a year and provided leased company cars to her and his brother-in-law, though neither seemed to perform any work, the suit says.

The cash flow became so desperate, the suit says, that Morgan was forced to sell a portion of Academic Financial's student loans at a significant discount, reducing revenue by more than a combined $19-million in 2005 and 2006.

Morgan fired back with a countersuit, claiming his three top executives violated non-compete agreements when they destroyed records and took trade secrets with them while resigning en masse to open a student loan company in 2006 called Atlas Education Finance.

Morgan and the plaintiffs settled their lawsuit in March, dismissing all claims.

"They were my friends, and they wanted a piece of the company, so I made them shareholders," said Morgan. "I gave them everything they wanted.

"But their allegations that I misappropriated money? That's not true. Absolutely."

Times staff writer Greg Auman and researcher John Martin contributed to this report. Jeff Testerman can be reached at testerman@sptimes.com or (813) 226-3422.

[Last modified July 17, 2007, 23:49:03]