Archive for Friday, February 27, 2004

Former Jayhawk gets 6 1/2 years for fraud

Weidner caught in lie during testimony

February 27, 2004


— A federal judge sentenced former banker Clinton Odell "Del" Weidner II to 6 1/2 years in prison Thursday for his role in a federal loan-conspiracy case that involved former Westar Energy Inc. chief executive David Wittig.

Weidner, 50, a former Kansas University football player and the former president of Topeka's Capital City Bank, was convicted in July of conspiracy, two counts of filing false bank entries and one count of money laundering. Before his trial, he pleaded guilty to two other counts of filing false bank entries.

"I've always tried to live my life the right way, how my parents taught me," a tearful Weidner told the court as his mother sobbed in a wheelchair in the gallery. "I didn't succeed."

Weidner, a Topeka native and standout high school athlete, was a linebacker with the Jayhawks from 1972 to 1974. During the 1973 season, when KU went 7-4-1, he injured his knee playing in the Oklahoma State game. He missed the final games of the season, but still made 22 tackles. He was president of the Kansas K-Club (1992-93) and a member of the K-Club board of directors (2001-2002).

The same jury that convicted Weidner also found Wittig guilty of the same charges, which were unrelated to Westar business. He is set to be sentenced today.

Weidner's conviction related to a $1.5 million personal loan Wittig made to Weidner. Weidner approved a $1.5 million increase in Wittig's $3.5 million personal line of credit at the bank so Wittig could lend the money to Weidner for a real estate investment in Scottsdale, Ariz.

U.S. District Judge Julie A. Robinson ruled Weidner must forfeit all proceeds from that land deal. The loan from Capital City Bank has been repaid.

In handing down her sentence, Robinson scolded Weidner for his testimony during Thursday's hearing, during which prosecutors caught him lying about his financial records.

"I don't quite understand what's going on with you," Robinson said. "It appears to me you are still chasing the dream that you'll be as wealthy as some of your bank customers were."

However, praising him for his charity work in Topeka and citing hundreds of letters written on his behalf by members of the community, Robinson sentenced Weidner at the lower end of federal sentencing guidelines.

"You're rich," Robinson said of the letters and support they expressed. "You don't need to keep chasing this obsession. I hope you will come to realize this."

Earlier Thursday, Assistant U.S. Atty. Rich Hathaway argued Weidner had obstructed justice by lying about his assets. FBI special agent Steve Smith testified he found evidence Weidner owned several cars he didn't include on financial statements filed after his conviction, including three Mercedes-Benz, two Porsches and a Jaguar.

Hathaway said Weidner never registered any of the cars in Kansas.

Weidner testified he sold the cars he owned, and denied ever owning one, a 1964 Mercedes. But Hathaway produced a document that showed Weidner had owned the Mercedes, and with his voice cracking, Weidner admitted that he did own the car and it was in his garage.

"So you lied under oath?" Hathaway asked.

"Yes, I did," Weidner replied.

That lie, and his failure to include in his financial statement artwork he had previously listed on loan applications, resulted in Robinson's increasing Weidner's sentence by 15 months.

"There will be no one harder on me than myself, and I will live with this obviously for the rest of my life," Weidner told Robinson. "I have a lot to be thankful for, but I have a lot of work to do to repay those people who believed in me."

Robinson told Weidner she had concerns about his mental condition, but hoped that he would leave prison a better person.

"In the final analysis, after you've gone through all of that, you have to forgive yourself," she said.

Robinson denied a prosecution request to take Weidner into custody immediately. She estimated it would be at least 30 days before he'll be incarcerated into a federal prison, and she'll recommend he be sent to Yankton, S.D.

Meanwhile, Wittig faces a separate 40-count federal indictment accusing him and former Westar executive vice president Douglas Lake of committing conspiracy, fraud and other crimes. Prosecutors allege Wittig and Lake tried to loot Westar, the state's largest electric utility.

Wittig and Lake are also in arbitration with Westar over their former employment contracts. Wittig claims he is owed $110 million and Lake, $70 million.

Under orders from arbitrators, Westar posted Wittig and Lake's claims on its Web site Wednesday.

In his claim, Wittig said Westar Energy "spins a fanciful tale" of misconduct as part of an effort to bolster its stock price and deflect scrutiny of the company. Wittig said Westar had tried to make him a "convenient scapegoat" for problems faced by the company.

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