The first year in his new job as administrative dean at Louisiana State University (LSU) went smoothly. The Middletons had a new house built on Highland Road near the campus, and an oil field was discovered under their property, bringing them royalties that would pay for their property many times over. University enrollment began to climb in 1938 and the LSU football team had just finished three outstanding seasons under coach Bernie Moore, winning 27 of their 30 regular season games. Middleton was photographed breaking ground for a new faculty club that year, as the campus grew in many areas. All seemed to be running well when in June 1939 the campus was given a shock from which it would take many years to recover. A New Orleans newspaper ran a photo on the front page showing an LSU truck unloading building materials in suburban New Orleans, revealing an illegal operation. The ensuing investigation led to the discovery that LSU's President Smith had embezzled nearly a million dollars from the university, using the money to cover his losses while speculating in the Chicago wheat futures market. Smith stood trial, and was sent to first Federal prison and later the Louisiana State Penitentiary in Angola. The LSU superintendent of grounds and buildings, George Caldwell, was also involved in the scandal and served time in Atlanta for tax evasion. Meanwhile, the state's governor, Richard Leche, resigned, but was soon found guilty of several federal charges and sent to Atlanta to serve time.