Former UK physics employee gets no jail time in embezzlement case

University of Kentucky.
University of Kentucky.

A former employee in the University of Kentucky physics and astronomy department who admitted defrauding the school of more than $200,000 will serve no jail time, a judge said Friday.

Instead, Steven Ellis, 67, was sentenced to four years’ probation by U.S. District Judge Danny C. Reeves.

Probation “is sufficient punishment in this case,” Reeves said.

Ellis, a former U.S. Army Ranger and a former physics professor at West Point, stood in court and apologized.

“I have disappointed and hurt the ones I love the most: my wife, two daughters and five grandchildren,” he said. “I will work the rest of my life to try to regain trust and my honor.”

Ellis has made full restitution to the university of $299,603.15, which includes $137,662.80 in embezzled money plus $161,940.35 for a refund of royalties and the cost of an audit, according to court records.

Reeves imposed a $5,000 fine on Ellis, which he may pay in increments of $100 a month over several years.

Ellis pleaded guilty in February to one count of theft from a federally funded organization. He was an employee of the UK physics and astronomy department who supervised the ordering and purchasing of lab equipment.

He acknowledged ordering equipment that became surplus equipment for the department. He then took that surplus equipment home and sold it on eBay and kept the proceeds for himself, according to the plea agreement with prosecutors.

UK police started investigating in April 2015, and in June 2015, they seized property from two storage units rented by Ellis. Police took 77 items, including desktop computers, monitors, dehumidifiers and projectors. Police determined that about half the items belonged to UK. He was fired in September 2015.

In one of the most serious findings, officials said that since 2003, Ellis had required his students to buy lab manuals that he had written and had published through an outside vendor.

Normally, if a professor requires one’s own books or texts to be used in a class, the professor must donate any royalties to the school. In this case, Ellis allegedly collected $84,794 in royalties from his students’ purchases since 2007. Students had bought about 14,000 manuals.

In his statement in court, and in a letter written by him in the court record, Ellis said he learned through therapy that he has repressed post-traumatic stress disorder that was triggered by the death of a close friend and fellow soldier. Ellis also indicated that his treatment by others at UK contributed to his actions.

“It doesn’t justify what he did but it kind of explains what he did,” said Fred Peters, Ellis’ attorney.

Ellis told the judge that he came to UK in 1995 to bring its labs up to a level of a top-20 university. His daughter, Natalie Collett, wrote that the physics and astronomy department “began to leave him out of key lab decisions, slowly dismantling his work year over year.

“They cut his budget, his staff so much that not only was he the lab coordinator but IT (information technology) support for the department as well as teaching almost full time,” Collett wrote. “He was marginalized, made fun of, and soon began to behave differently.”

Ellis acknowledged that he was “disgruntled” and said he saw his work of 20 years “thrown away for a new pedagogy” at UK, where “they threw out what I had done without talking to me.”

Assistant U.S. Attorney Dmitry Slavin said Ellis made it sound as though he was the victim when “the university is the victim.”

His treatment at UK “is not an excuse in any way to break the law,” Slavin said. Many employees might be mistreated and abused by their supervisors, “but the vast majority of people in that situation do not break the law.”

Reeves, the judge, said Ellis’ lack of a criminal history, his “exemplary” military service, and a “stellar” family and community-service history all led him to conclude that incarceration serves no purpose.

“Mr. Ellis says he has lost his honor and integrity. Not really,” Reeves said.