Douglas County victims of white-collar crimes receive little, if any, restitution

For the past decade, the whereabouts of Steve McMurry have remained a mystery to Kansas University officials – despite his $250,000 debt.

McMurry, who embezzled more than $257,000 from the student-run organization KU on Wheels in 1982, has paid just $3,000 back. And, in spite of filing civil lawsuits and hiring a lawyer in Boulder, Colo., to help keep tabs on him, the university hasn’t received a payment since 1989.

“We’ve done everything legally we can do. The only thing left to do is call Dog the bounty hunter to see if he can bring him in,” KU spokesman Todd Cohen joked.

McMurry is one of the more notorious cases in Douglas County of white collar criminals found guilty of embezzling money and leaving thousands – or in some cases hundreds of thousands – of dollars unpaid.

Douglas County District Attorney Charles Branson said that victims of embezzlement crimes are rarely paid back in full.

“It is a crime. There are very few things that make a victim whole after a crime has been committed,” Branson said.

$4 million left unpaid

Victims in Douglas County are owed more than $4.6 million in restitution, according to court records taken from several databases that date back to the late 1980s.

District Court Clerk Doug Hamilton said after 12 years, if the state or the victim does not ask for a revival, restitution orders can be extinguished.

Alan Ellebrecht owes the most restitution in Douglas County, $851,414. His former business partner, John Carland, owes $174,793, according to court records. In 2002, Ellebrecht pleaded guilty to selling securities without being registered as a broker and of selling unregistered securities. Carland was convicted of security fraud the same year.

Hamilton said Ellebrecht is still making payments. It is unknown whether Carland is making payments.

A woman convicted of scamming a retired judge and his wife, Jolene Harrell, still has $120,000 left to pay on a conviction made last summer.

Almost a year and half after his sentencing, the former head of the Lawrence’s teachers union, Wayne Kruse, has $90,684 left to pay. In 2005, Kruse was ordered to repay $95,384, the amount he stole from the Kansas National Education Association.

Most white collar criminals are first-time offenders and are placed on probation. Even if restitution is set as part of that probation, once the period is up, the guilty are under no real obligation from the criminal courts to pay it off.

“I wish the system was better capable of gaining restitution for people, but criminal justice isn’t designed to be a debt-collection system,” Branson said.

Part of the issue is a philosophy that has been in place since the start of the country’s justice system, Branson said, which frowned upon the Old World concept of debtor’s prison.

“Do you want to put someone in jail that isn’t a danger to the public but only owes money?” Branson said.

Other tales

KU isn’t the only local school that has been fleeced.

Gerry Burd admitted to stealing more than $100,000 from the Haskell Foundation in 2001. Burd had stopped making payments before he committed suicide in 2005. In all, Michael O’Leary, who is the chief financial officer for Haskell Foundation, said the foundation was repaid less than $1,000.

For small businesses, embezzlement can be devastating.

The owners of the father-sons business Kornbrust Pole Line Builders Inc. haven’t seen any money from the $389,000 that Randall Asbury was charged with stealing from the company in 1999. Asbury was sentenced to more than three years in prison and then spent more time in jail for another crime.

Charlene Kornbrust, wife of the owner Hubert Kornbrust, said they have been notified that Asbury was out of prison, but they don’t know where he is and haven’t received any payments. Her husband hasn’t taken legal steps to get the money back, she said.

“He never tried,” she said. “He had all he wanted. It was terrible.”

Asbury was in charge of buying and selling equipment for the business and was caught after the Internal Revenue Service came in to look at the books before an auction. The family had to sell the entire business, Charlene Kornbrust said, to pay off back taxes.

“All the extra money from the business, (Hubert) put back in the business and figured he had his retirement,” Charlene Kornbrust said.

After the incident, they “struggled a little,” she said, but now Hubert’s two sons are running successful businesses, and her husband is receiving his union pension.

Not all embezzlers skip out on their duties to pay back the money they took. Shelly Ausherman, wife of a Willow Township trustee, paid back $30,000 before going to prison in 2005. After her release, she continued to make monthly payments.

McMurry’s trail

KU leaders don’t expect that McMurry’s debt will be repaid.

Between 1973 and 1982, McMurry siphoned money out of KU on Wheels. He was caught in September 1982 when a check bounced that was written to the bus system but deposited in McMurry’s personal account.

McMurry was found guilty on five felony counts of theft and sentenced to two to five years in prison. When McMurry was released early from prison in 1984, part of his condition of parole was to make restitution payments of $200 a month.

Court records show that for four years, McMurry made monthly payments – although the majority were for far less than $200. Then, in 1989, he stopped paying.

Because McMurry was no longer under parole, he wasn’t obligated by the criminal court system to pay off the rest. In 1993, the restitution was waived.

KU had the option – which it took – to pursue the case in civil court.

The IRS also placed a lien on McMurry for $222,000, which puts the agency first in line if any payments are ever made.

In 1992, the university hired an attorney to track down McMurry in Boulder, Colo., where he was living.

Mary Prewitt was an assistant general counsel in the early 1990s when the university took a renewed interest in McMurry.

“We could have spent hundreds if not thousands of dollars keeping track of Steve McMurry and never gotten another dime out of him,” Prewitt said.

The last account the university had of McMurry came from a newspaper article published by the Journal-World in 1994. At that time, McMurry was still living in Boulder and doing landscaping and design work.

When contacted recently, his father, Dean McMurry, who lives in Boulder, said he doesn’t know where his son is but had heard he had been living in Belize, and, for a time, in Houston.

If McMurry ever would resurface, KU spokesman Cohen said, the university would try to recoup the money.

“I think it’s always an open case. You never know when people will pop up,” Cohen said.

Prewitt said investigations never uncovered any accounts where McMurry stashed the $257,000 or revealed valuable assets that they could sell.

“We never found any; we looked, believe me,” Prewitt said.

Instead, Prewitt holds to the theory that McMurry “frittered it all” and said he was known to have an “extravagant lifestyle.”

It is not uncommon, Branson said, for embezzlers to have nothing to show for the thousands of dollars they steal.

“In the three biggest cases I’ve seen, they’ve blown the money, lived a little better, ate out a little more, spent a little more freely,” Branson said.