Witness: Banker requested that loan from former Westar CEO stay secret

Assistant testifies defendant confided in her about loan from Wittig

? The former president of a Topeka bank confided to his assistant about receiving a $1.5 million loan from his customer David Wittig, who was then chief of Westar Energy Inc., the assistant testified Tuesday.

Christy Gurney testified in U.S. District Court that her boss, Capital City Bank president Clinton Odell Weidner II, told her about the loan in early June 2001 — about five weeks after he received the money and invested it in an Arizona real estate project.

Gurney said Weidner told her to keep the information about the loan confidential.

But Gurney said she reported Weidner’s statements to other officials of the bank and outlined them for bank owner Frank Sabatini in March 2002. Weidner was then suspended by the bank and later resigned.

Gurney was the last of the government’s 10 witnesses, and the sole witness testifying Tuesday, in the bank fraud trial of Wittig and Weidner. They are accused of conspiring to hide the loan’s existence from regulators and the bank’s directors, partly by making false bank reports.

Lawyers for Wittig and Weidner planned to argue today for an order by Judge Julie A. Robinson to acquit both men for lack of evidence.

“The evidence, with regard to Mr. Wittig, is wholly circumstantial,” Wittig’s attorneys wrote in a motion for acquittal submitted Tuesday.

Most of the prosecution’s case related to the activities of Weidner, who pleaded guilty to two charges just before jury selection began last week and went to trial on five other counts.

The case focuses on Wittig’s loan of $1.5 million to Weidner on April 30, 2001 — the same day that the bank increased Wittig’s personal line of credit by $1.5 million. Weidner was Wittig’s loan officer and had recommended the increase in the utility executive’s $3.5 million line of credit.

Weidner, 50, admitted in his guilty pleas he failed to disclose the loan on two documents: a personal financial statement he filed in May 2001, and a bank form asking if anyone at the bank would benefit from the increase in Wittig’s line of credit.

But Weidner insisted he never informed Wittig about the deceitful documents. Defense lawyers said Weidner’s guilty pleas would make it harder for prosecutors to gain convictions of the defendants on two other charges of making false bank entries or on conspiracy or money laundering charges.

Wittig, 47, has denied all the charges. His lawyers contend that only bankers, not their customers, are bound by federal laws on filing false bank entries.

And they took aim Tuesday at the centerpiece of prosecutors’ case, a January 2002 personal balance sheet filed with the bank. The sheet, which is designed to show that Wittig and his wife could cover their obligations, did not mention the loan to Weidner.

Under cross-examination Tuesday, Gurney acknowledged that balance sheets filed by Wittig and his wife usually omitted some assets and liabilities. Those included anything the bank would have already known about such as their mortgage, checking accounts and money market funds.

None of the allegations suggest that Capital City Bank or Westar were harmed financially by the loan, which was repaid in full.

Under prosecution questioning Tuesday, Gurney described the private conversation in which Weidner told her about his loan from Wittig.

“We were talking about the stresses of our work environment at that time, and I jokingly said he was in a position where he could easily walk away,” Gurney said.

Weidner replied that he could not do so at the time because “he had some investments he needed to attend to,” Gurney said.

Gurney said Weidner then told her that he had invested in a luxury residential development in Scottsdale.

“He knew he couldn’t seek the funding himself from the bank, so he approached Mr. Wittig about the opportunity and Mr. Wittig gave him this loan,” she said.

Gurney said Weidner told her that he “expected to realize about $1 million in profit.”

Neither Assistant U.S. Atty. Richard Hathaway nor the defense lawyers asked Gurney why she did not reveal the conversation to the bank’s chief lending officer until October 2001. There was no testimony about what action bank officers took between then and Gurney’s meeting with Sabatini, the bank’s owner, in March 2002.