Wittig loses riches

Jury orders execs to turn over millions

? A federal jury on Thursday ordered two former Westar Energy Inc. executives found guilty of looting the utility to hand over millions of dollars in cash and assets linked to their crimes – but much less than federal prosecutors had sought.

Following a day of deliberations, jurors told former chief executive officer David Wittig to hand over his Topeka home, the historic Landon Mansion, thousands of shares of stocks, a split-dollar life insurance policy and $9.7 million in bonuses and other payments made while working at the Topeka-based utility.

His co-defendant, former chief strategy officer Douglas Lake, of New Canaan, Conn., was ordered to turn over $2.5 million in stock dividends and sales, as well as several thousand stock shares.

Both men also must forfeit any award they receive from an ongoing arbitration fight they’re having with Westar over pay and benefits they say the company still owes them.

Prosecutors had asked the two men to forfeit all the salary and benefits they had received before being forced out of the company in late 2002, which came to $27.9 million from Wittig and $9.4 million from Lake.

U.S. Attorney Eric Melgren, whose office prosecuted the case, had little comment on the verdict, beyond commending attorneys and investigators in the case.

Lake’s attorney, Edward Little, said he considered the verdict a “win” for his client.

“We’re obviously still disappointed in the main verdict and will vigorously appeal that to the 10th Circuit (Court of Appeals),” Little said. “At least the jury (on the forfeiture charge) didn’t go overboard and didn’t believe the government’s argument that everything was a fraud.”

Wittig’s attorney, Adam Hoffinger, didn’t immediately return a phone call seeking comment.

The same jury convicted Wittig on Monday of 39 counts, including a count of conspiracy, seven counts of wire fraud, 14 counts of circumventing internal controls and 17 counts of money laundering while running Westar.

Lake was found guilty of 30 counts, including one count of conspiracy, six counts of wire fraud, 13 counts of circumventing internal controls and 10 counts of money laundering. Lake was acquitted of seven counts of money laundering, one count of circumventing internal controls and one count of wire fraud.

U.S. District Judge Julie Robinson on Thursday scheduled their sentencing for Jan. 9.

They face up to five years each for the conspiracy count, 10 years for each count of circumventing internal controls, 20 years for each count of wire fraud and 10 years for each count of money laundering.

Prosecutors said the men engaged in a number of schemes aimed at inflating their compensation and then hiding it from the company’s board of directors and shareholders.

After the trial, the jury had to consider a final count of forfeiting any property linked to the crimes, which required its own hearing. During that two-day hearing, prosecutors argued that Wittig and Lake had joined Westar with the intention of looting it, meaning everything they had received while at the company should be considered ill-gotten goods and surrendered to the government.

In the end, however, jurors were much less vengeful than prosecutors had hoped.

Wittig and Lake were allowed to keep millions of dollars in salary, health and dental benefits, car allowances, discretionary accounts and other routine payments.

Jurors asked Wittig to turn over the Landon Mansion, which was valued at $1.8 million before he spent $6 million on renovations; $700,000 in art and furnishings in the home; a $17,460 down payment on a Ferrari; a split-dollar insurance policy worth up to $28 million; a $5.4 million signing bonus; $4.3 million in stock sales and dividends; thousands of shares of Westar stock and stock in home security company Guardian International Inc.

For Lake, jurors said he must forfeit more than $2 million in stock sales and dividends and thousands of shares of Westar and Guardian.