Prosecutors demand $27.9M from Wittig

? Jurors in the federal fraud trial of former Westar Energy Inc. Chief Executive Officer David Wittig began deliberations Wednesday on whether to force Wittig to hand over millions of dollars in cash and assets, including his Topeka mansion.

The jury on Monday found Wittig and Douglas Lake, the Topeka-based utility’s former chief strategy officer, guilty of conspiracy, wire fraud, money laundering and circumventing internal controls. Prosecutors claim the two men used a variety of schemes to increase their compensation from Westar, then hid it from the company’s board of directors and shareholders.

The men face an additional charge of forfeiture, which was the subject of a separate two-day hearing before the same jury that convicted them. The hearing, which ended Wednesday, is to determine how much money and assets the men must turn over as proceeds of their crimes.

Assistant U.S. Attorney Richard Hathaway argued that because the men joined Westar with the intent to defraud, everything they received during their time there – even dental and health insurance benefits and a car allowance – should be considered ill-gotten goods and forfeited to the government.

Prosecutors, following two days of testimony on the forfeiture charge, have demanded $27.9 million from Wittig and $9.4 million from Lake.

“It would be the ultimate crime in this case that individuals found guilty by the jury to be engaged in a conspiracy to defraud could walk away with the very benefits that were the ultimate goals of the conspiracy,” he said.

Defense attorneys disagreed, saying prosecutors hadn’t provided evidence to clearly link many of the men’s benefits and salary to criminal acts.

The outside of David Wittig's Topeka home is seen in this 2004 file photo. Jurors began deliberations Wednesday on whether to force Wittig to hand over millions of dollars in cash and assets, including his Topeka mansion.

For example, Jeff Morris, one of Wittig’s defense attorneys, said that while Wittig used stock and life insurance benefits he received at Westar as collateral for $6 million in loans to renovate his home – a historic mansion that belonged to former Gov. Alf Landon until his death in 1987 – prosecutors never showed where Wittig and his wife, Beth, got the down payment.

“Be careful of a government emboldened by the verdict Monday that will ask you to overreach,” Morris told jurors, later adding, “I fully expect you will forfeit some property, but the verdict you gave Monday does not get the government where it wants to take you.”

Edward Little, Lake’s lead defense attorney, acknowledged some assets could be reasonably tied to the crime, including a $262,500 payment the company gave to Lake to offset the sale of a house in New York that he never sold and a series of stock awards in a home security company that prosecutors claimed he and Wittig received fraudulently. But he said the rest of the cash and assets were never brought up during the trial.

“Do not invalidate your verdict by going in there and saying, ‘We’re going to punish them and check off everything,’ because that’s lawless,” Little said.