Judge sends Wittig to federal prison
Financial moves costly for ex-Westar CEO
Topeka ? Former Westar Energy Inc. Chief Executive Officer David Wittig was sent to federal prison Tuesday after a judge ruled he had violated terms of his release while he appealed convictions for bank fraud and looting Westar.
U.S. District Judge Julie Robinson said numerous financial transactions by Wittig and his wife, Beth, were made without the court’s approval, which was required under the terms of his bond agreement.
Robinson rebuffed an offer by Wittig’s defense attorneys for more strenuous restrictions on his personal finances as an alternative to prison.
“All of it smells like bad faith to the court,” she said after a six-hour evidentiary hearing spread over two days. “The clear and convincing evidence is that the defendant is not likely to abide by any condition of release.”
Wittig showed little emotion as he handed over his personal items and belt to his lawyers and was escorted out of the courtroom by U.S. marshals. Unlike at the bank fraud and looting trials, Wittig’s wife didn’t attend the hearing.
The U.S. Attorney’s Office said, for security reasons, it couldn’t announce where Wittig was being held.
Wittig was convicted in July 2003 of conspiracy, bank fraud and money laundering for helping former Capital City Bank President Clinton Odell Weidner II hide from bank officials and federal regulators a $1.5 million loan made between the two men. Wittig was sentenced to 51 months in prison.
He was convicted again in September, along with former Westar chief strategy officer Douglas Lake, of wire fraud, conspiracy, money laundering and circumventing internal controls in a scheme to surreptitiously increase his compensation at Westar. Sentencing is scheduled for April 3.
Robinson had allowed Wittig to remain free on appeal, provided he didn’t do anything that could diminish the value of or hide his assets, which he might have to turn over to the government or use to pay fines or restitution. That included a requirement that he get prior court approval for any transaction of $25,000 or more and avoid using money or assets tied directly to his criminal charges.
She later lifted the $25,000 reporting requirement as long as the transaction involved paying Wittig’s legal fees.
But prosecutors argued that beginning in early 2003, Wittig and his wife began shifting large amounts of money between several bank and investment accounts, including accounts they said were “tainted” by money tied to the criminal charges. While many of those transactions were made before Robinson imposed her restrictions on the transactions, some were made after the order was in place but weren’t disclosed to prosecutors or the court.
Prosecutors claimed the Wittigs planned to eventually put all of Wittig’s assets in Beth Wittig’s name, keeping them out of the reach of authorities.
“After examining the financial records presented by the defendant, I can find no reasonable basis to consider (the transactions) as money management, but an effort to move money to conceal its source,” said Assistant U.S. Atty. Richard Hathaway.
Wittig’s defense attorneys repeatedly said the transactions, while confusing, were aimed at paying his legal fees. They placed the blame on themselves, saying they misinterpreted the court’s order, thinking that as long as the end result of the transactions was paying legal fees, they didn’t need to provide additional details or get specific approval.
They added that the money transfers involved proceeds from the $13 million sale of the couple’s New York apartment in 2003, which was not tied to any criminal charges, although it was commingled in an account with assets that were supposedly off-limits.
“There is insufficient evidence that there was intentional wrongdoing by David Wittig,” said defense attorney Jeff Morris.
Robinson dismissed that argument, however, agreeing with prosecutors that the “web” of transactions was suspicious. She also said Wittig and his wife, both longtime investors, were sophisticated enough to not need the system of transfers to pay legal fees.
“The court is convinced that this activity was done with knowledge and intent,” she said.







