Business

Business

Wittig allowed to keep mansion

January 5, 2006

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— David Wittig, the former Westar Energy Inc. chief executive convicted of looting the utility, will not have to give up his Topeka mansion or hundreds of thousands of dollars in art and furnishings prosecutors say he bought with ill-gotten gains, a federal judge has ruled.

In a ruling filed Tuesday, U.S. District Judge Julie Robinson upheld the majority of a Kansas City, Kan., jury's decision in September requiring Wittig and his co-defendant, former chief strategy officer Douglas Lake, to forfeit millions of dollars in stock, insurance payments, incentive bonuses and other assets tied to their crimes.

But Robinson said that the government failed to provide a direct connection between Wittig's schemes to defraud the Topeka-based company and his purchase of the historic Alf Landon Mansion, as well as a long list of household items, including $282,500 in audio/video equipment and a $15,000 pool table.

Instead, Robinson said Wittig will have to forfeit $4 million - the value of renovations Wittig made to the mansion with a line of credit that used Westar stock and other collateral tied to Wittig's fraud. The house itself has been appraised at less than $2 million.

Wittig and Lake were found guilty Sept. 12 of conspiracy, wire fraud, money laundering and circumventing internal controls during their tenures at Westar, the largest electric utility in Kansas. Sentencing is scheduled for April 3.

Prosecutors claimed that Wittig poured $6.5 million into the mansion, hoping to recoup the money through a provision in his employment agreement with Westar that required the company to buy the mansion, including the value of all renovations plus 17 percent, in the event the utility was sold.

Wittig and Lake were behind an effort to sell Westar's electric business to a New Mexico utility and spin off its unregulated subsidiaries to a separate company that they would run. Westar's board of directors didn't know the extent to which the sale would benefit the two men, prosecutors said.

The Kansas Corporation Commission ultimately shot down the deal.

Wittig argued that because the buyback provision was never triggered by a sale of Westar, he never committed a crime and shouldn't have to give up his house and property.

But Robinson disagreed, saying, "that the change in control never materialized does not alter the fact that proceeds traceable to the scheme to defraud were used to renovate the Landon Mansion."

Jeff Morris, one of Wittig's defense attorneys, said Wittig is appealing the forfeitures but was pleased that Robinson agreed that prosecutors hadn't proven their point as to the mansion and the furnishings.

"Her ruling tracks what we said to the jury about the lack of the government's evidence and the weaknesses in the government's theory," Morris said.

The U.S. Attorney's Office declined to comment on Robinson's decision.

Robinson also upheld that Wittig will still have to forfeit $17,460 in the value of a 2001 Ferrari and any award he receives from an ongoing arbitration case he and Lake have with Westar over millions of dollars in salary and benefits the two men say the company still owes them.

She also approved an agreement allowing Wittig and his family to remain in the mansion pending appeals.

Morris, who also serves as attorney for Wittig's wife, Beth, said that with the forfeiture now decided she will likely file papers to protect assets that are in her name as well as that of her husband.

Robinson will also hear arguments Friday from prosecutors that Wittig has violated the terms of his release pending appeal and should be put back in jail.

Comments

Sigmund 9 years, 3 months ago

Shouldn't the headline here be: "Jury's Decision Upheld: Wittig To Pay $4 Million Fine" In fact, if Wittig had only to forfiet the mansion its value is only half of that, $2 nillion.

Rich Minder 9 years, 3 months ago

What!!! I guess it would have been too much to ask that the rate paying public get back their money from the rotten thief.

just_another_bozo_on_this_bus 9 years, 3 months ago

I expect that in the end, it'll be his lawyers who see any cash from this ruling.

craigers 9 years, 3 months ago

Now in business law we were taught that if transactions/agreements blurred the lines between personal and business then prosecutors could go after the person themselves. I don't think any of Wittigs transactions were more than arms length. Any thoughts?

samsnewplace 9 years, 3 months ago

And they think justice was served here? Judge needs to go back to college and re-take most of the classes it would seem.

just_another_bozo_on_this_bus 9 years, 3 months ago

In this economy, Wittig's crime was getting caught. The BOD at Westar was more than willing to sacrifice him and Lake so that they could continue to get rate hikes like the one they just got, and sothey could continue overpaying each other for doing little more than approving each other's egregiously high compensation packages.

redmorgan 9 years, 3 months ago

It just makes me hope that karma is real.

Staci Dark Simpson 9 years, 3 months ago

Are we really surprised? What a big fat hairy loser!!

trinity 9 years, 3 months ago

holy sheeot...i'll take the kitchen, the bar, the theatre room, and at least one bathroom preferably the one with the big-a**'d ol' tub. gawd!

take this place away from that crook!

b_asinbeer 9 years, 3 months ago

That's a nice house....wouldn't mind living in that one!

pelliott 9 years, 3 months ago

Could the corporation sue him and his pal in civil court?

samsnewplace 9 years, 3 months ago

Judge Julie needs a new job, evidently she forgot what crime and being a criminal means. Anyone have a job for Judge Julie? What a stupid thing to do, it just baffles me that she is actually a college graduate. Maybe they didn't teach law classes at her college? Amazing...I guess in Topeka, Crime Does Pay! What a house to walk away with. Judge Julie should be ashamed!!!!!

Jamesaust 9 years, 3 months ago

I am surprised at the outcome but not surprised at the ruling.

Man bought a house with his money. Government claims the money to do so was stolen and presents evidence to a jury. Jury doesn't buy Government's case. Judge refuses to substitute her own (unelected) judgment for that of the People.

What's the problem here?

I'm inclined to believe there is enough evidence linking the money to pilfering of the corporation too but who am I (or anyone else) to substitute my judgment for that of the jurors who reviewed all of the evidence? (Jurors, I might add, who have demonstrated no great softness for the Defendent.) The ONLY basis for the Judge to have done so under law is if she judged that the jury could not have arrived at its conclusion from the evidence, not that she personally thinks they got it wrong.

MidwestJD 9 years, 3 months ago

What a shame to see all these Judge-bashers out there. Judge Julie likely has more education and experience in her little finger than the whole lot of us combined. How quickly some forget that if Judge Julie had not stuck with this case along with the Government prosecutors, it might have all ended with the mistrial back in April and Wittig and Lake would have gotten off completely scott-free. But if you still want to assign blame for those crooks getting to keep their massive crib, why not blame the Government's Attorneys who, in the Judge's eyes "failed to provide a direct connection between Wittig's schemes to defraud the Topeka-based company and his purchase of the historic Alf Landon Mansion." It was apparently the Government's burden to show and they blew it. Don't forget that even an upstanding, law-abiding public utility exec can still likely afford to drop some serious scrill on a pimped out crib every now and then.

BunE 9 years, 3 months ago

Judge Bashing is just code for "I don't get it"

Sort of like activist judge is code for "I don't agree with that ruling"

Ben_Franklin 9 years, 3 months ago

The artwork could be worth millions and undoubtedly he has millions in secret offshore accounts.

Godot 9 years, 3 months ago

Bozo wrote: "In this economy, Wittig's crime was getting caught. The BOD at Westar was more than willing to sacrifice him and Lake so that they could continue to get rate hikes like the one they just got, and sothey could continue overpaying each other for doing little more than approving each other's egregiously high compensation packages."

OMG. The fact that these board members were lazy and incompetent in no way excuses the larceny of Wittig and Lake. A civil suit should be brought against the Board by the stockholders, of which I am one. Thirty years ago, my mother earned a few shares of KPL in her retirement by working at the "cardex", the manual data base of KPL customers. I inherited those shares when she died. They are now worth less than she paid for them 30 years ago.

Godot 9 years, 3 months ago

If you had to be incarcerated in a nursing home because of physical or mental disability and had to file for, and receive, help from the State of Kansas in the form of Medicaid, the State would require that you liquidate all your assets, down to around $2,000, to pay for your own care, before you could receive housing and medical assistance at the expense of the State. If you had a spouse, and you owned a house, your spouse would be allowed continue to live in that house for the rest of his/her life. When he/she died, the state would make the heirs sell the house to reimburse the state for all the money It had spent for your housing and medical care while disabled.

This very severe treatment is meted out to people who require state sustenance merely because they become very ill and/or disabled.

The same rules, and more, should apply to the people who are incarcerated by the state because they have been convicted of committing a crime against society.

terrapin2 9 years, 3 months ago

Godot It wasn't the State of Kansas that brought charges against Wittig and Lake! It was the U.S. Attorney's Office. And if you haven't noticed, the Feds plan to keep the money instead of giving it back to Westar. That's something else you and the others should be mad about.

And in response to many of the other comments that were made, I suggest you read the article again. Judge Robinson ordered Wittig to forfeit even more money than the Landon House has been appraised for, not to mention it would probably be auctioned off by the Feds for less than the appraised value. Besides the ruling on the Landon House, Judge Robinson upheld the rest of what the jury said he should forfeit, including millions of dollars in other benefits. Besides, this was one of only a few decisions that Judge Robinson made in Wittig's favor in all three trials. Wittig lost his job at Westar, has little chance of landing another one anytime soon, and in April he could be sentenced to many years in Federal prison. How do you possibly think that he's getting off easy? Gimme a break!

Godot 9 years, 3 months ago

Why should we care that Wittig can't work again? He has proved he is nothing but a common criminal, that he has not even the slightest inkling of what it takes to be a good world citizien. He cannot be trusted.

Ooooh, poor Wittig, he robbed the stockholders of Westar and the ratepayers of Kansas millions of dollars. We should feel soooooooo sorry for him that he can't get a multi-million dollar job between now and his stint in Federal prison.

I am so verklempt!

just_another_bozo_on_this_bus 9 years, 3 months ago

"The fact that these board members were lazy and incompetent in no way excuses the larceny of Wittig and Lake."

You're incredibly naive if you think the BOD was completely ignorant of what Wittig and Lake were up to, although I don't doubt that they were well-compensated for being willfully ignorant.

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