Restraining order stops payments to banker found guilty of fraud

Wittig co-conspirator paid $325,000 after 2003 conviction

? A business partner of a former Topeka banker convicted in a loan conspiracy case has been ordered to stop making direct or indirect payments to him.

The restraining order in the case involving Clinton Odell “Del” Weidner II was issued March 5 by U.S. District Judge Julie Robinson, but it remained under seal until this week. According to court documents, Michael Earl, who was a partner with Weidner in an Arizona real estate venture, had paid the former banker $325,000, payments made after Weidner’s conviction last July.

The case against Weidner, who was president of Capital City Bank, involved a $1.5 million personal loan he got from co-defendant David Wittig, former president, CEO and chairman of Topeka-based Westar Energy.

Weidner had increased the utility executive’s personal line of credit at the bank by the same amount, $1.5 million. Weidner then used the money Wittig loaned him to invest in a real estate development in Scottsdale, Ariz.

Weidner was sentenced in February to 6 1/2 years in prison for conspiracy, filing false bank entries and money laundering. Wittig, also convicted of conspiracy, false bank entries and money laundering, got a sentence of four years and three months.

Appeals for both men are pending.

Weidner also was ordered to forfeit all proceeds from the Arizona land deal. According to the documents unsealed Wednesday, the escrow account set up last year to hold proceeds from the real estate venture had no money in it on Feb. 26, the day Weidner was sentenced.

The order issued March 5 prohibited Earl from making payments directly or indirectly to Weidner and prohibits any action that would hurt the value of Eagle Ridge, the residential development in which Weidner invested.

Bob Eye, one of Weidner’s attorneys, said Thursday that Weidner was owed for other property he sold that wasn’t part of the $1.5 million loan. The payments were made before the March restraining order, he said.

In the request for the restraining order, the U.S. Attorney’s Office said that last April Earl agreed to deposit as much as $1.5 million in funds payable to Scottsdale Sierra Eagle Ridge LLC into an escrow account. In exchange, the government released control of the Eagle Ridge property.

From the escrow, Earl was allowed reimbursement for expenses “related exclusively” to the Eagle Ridge property, the document says. However, sales proceeds of nearly $700,000 had been deposited in the escrow account since it was created and about the same amount had been withdrawn as of late February, the government said.

Of that amount, $482,340 was transferred to another limited liability corporation account that Earl controls.