Archive for Thursday, February 22, 1990

VERDICT

February 22, 1990

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— A federal jury Wednesday found Wichita oilman James W. Hershberger guilty on 25 fraud-related charges in connection with what prosecutors said was a scheme to defraud investors and banking institutions.

However, the jury acquitted Hershberger on six other counts related to the operations of his now-defunct oil company, Petroleum Energy Inc. The jury also was unable to reach a decision on six other counts.

Hershberger had been charged with 37 counts, most of them related to mail and bank fraud. The jury delivered its verdict during the sixth day of deliberations.

Hershberger, a nationally ranked sprinter at Kansas University during the early 1950s, was inducted into the KU Athletic Hall of Fame in 1987. He has been a benefactor of KU athletics; the artificial track in Memorial Stadium is named after him.

SENTENCING was set for May 7 in U.S. District Court before Judge Dale Saffels. Hershberger faces a maximum sentence of 130 years in prison and $70,000 in fines.

Hershberger, 58, left the federal court building without talking to reporters but his attorney, Thomas Haney, said the defendant and his wife, Sally, were ``devastated'' by the verdict.

``This is a client who has done wonderful things for his community and this state,'' Haney said, ``so that makes it doubly tough. We're very disappointed. We're still in a state of shock.''

Haney said he would have to discuss an appeal with Hershberger, and that decision will not be made quickly. ``We'll decide within the time allotted under the court's procedures,'' Haney said.

Richard Hathaway, the assistant U.S. attorney who prosecuted the case, said it was ``a tough decision for the jury.''

But, he added, the verdict was in accordance with the testimony and an appropriate outcome. As to the no decision verdicts, he said he would study them.

AS THE FIRST guilty verdict was announced by the court clerk, Sally Hershberger wept, and continued to sob into her hands which were clasped in front of her face.

Hershberger put his arm around his wife, consoling her, then stared into the table at which they sat while the rest of the verdicts were read.

He looked at the jurors as senior District Court Judge Arthur Stanley polled the jury individually to ask them if the verdicts represented their opinion. All said they did.

The eight women and four male jurors left the courthouse by a back stairway and did not talk to reporters, which was their choice.

Stanley, of Leavenworth, took the verdict in the absence of Saffels, who was in San Francisco attending a judge's meeting.

Stanley said the six counts on which the jury did not reach a verdict were ``still pending,'' meaning the government could continue the prosecution if it chooses.

Stanley continued the bond that Hershberger has been free on.

HERSHBERGER did not testify during his trial, which began Jan. 8 in U.S. District Court. The jury received the case Feb. 12 after hearing testimony from 71 witnesses during the five weeks of testimony.

In his closing arguments Feb. 12, Hathaway reiterated government charges that Hershberger had defrauded banks and investors by a variety of schemes, including charging investors to steal their own oil.

Hathaway also asserted that Hershberger knew of all the allegedly illegal transactions and directed others' involvement in them. Calling it a tedious case, Hathaway concluded that Hershberger's motive was ``pure greed.''

In his summation, defense attorney Haney warned the jury to discount what he called ``red herrings'' or diversions by the prosecution from real issues. Those diversions, he said, included an athletic contest that Hershberger was accused of fixing so he would win it, so-called ballot-box stuffing to get his picture on Wheaties cereal boxes and a 1981 story by Sports Illustrated of Hershberger's athletic career.

HANEY reminded the jury that Hershberger's chief accusers, former employees Dyrk Dahl and Steve Levandowski, had made plea bargain agreements with the government to testify against Hershberger. Dahl and Levandowski will now be sentenced under their plea agreements.

Hershberger went to trial after a federal grand jury in Topeka indicted him last Oct. 5 on the 37 counts following a year of hearing testimony about his dealings and those of his business associates.

Hershberger was considered a candidate for lieutenant governor in 1990 and had expressed interest in running for governor as a Republican in 1994. However, financial problems that forced him to sell his multi-million dollar Wichita mansion last year ended his political aspirations.

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