It’s a cautionary tale for college advancement offices, showing that it never hurts to do a little research into the backgrounds of unknown donors who want to make splashy pledges.

Westminster College in Salt Lake City learned that lesson the hard way recently, according to The Salt Lake Tribune. A year after announcing that 28-year-old Warren Kyle Foote, a “successful entrepreneur” who “owns and operates a number of successful enterprises,” would donate $3.4-million to the college to endow an institute at the business school in his name, the college is seeking a new benefactor because Mr. Foote’s businesses turned out to be frauds.

A few months after Westminster announced the W. Kyle Foote Institute for New Enterprise in a news release, Mr. Foote was facing felony charges of fraud and passing bad checks.

A Westminster spokeswoman, Laura Murphy, told the Tribune that the news release had been based on information Mr. Foote provided, and that the college did not customarily conduct background checks on donors.

Mr. Foote told the Tribune that he had expected to fulfill his pledge to Westminster, though he did not want publicity or for the institute to be named for him.

The Institute for New Enterprise still opened last year, and the college is looking for a donor who would like to endow it and have it named for him or her, said Lisa Actor, Westminster’s assistant vice president for advancement.

Ms. Actor said the Foote episode wouldn’t change how Westminster solicited gifts.

“It was a disappointment. I don’t remember any red flags. He was a person who wanted to give back,” Ms. Actor told the newspaper. “We always enter into dialogue with potential donors in good faith, and we assume they are working with us in good faith.” —Kathryn Masterson