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Archive for Wednesday, June 18, 2008

Wittig’s prison sentence upheld

Former Westar Energy Inc. Chief Executive Officer David Wittig, back center, leaves the Robert J. Dole U.S. Courthouse with his wife, Beth, front center, and his attorneys in this Sept. 12, 2005, file photo. An appeals court on Tuesday ruled that a two-year prison sentence in a personal loan case was appropriate; Wittig had served about one year before being released on appeal.

Former Westar Energy Inc. Chief Executive Officer David Wittig, back center, leaves the Robert J. Dole U.S. Courthouse with his wife, Beth, front center, and his attorneys in this Sept. 12, 2005, file photo. An appeals court on Tuesday ruled that a two-year prison sentence in a personal loan case was appropriate; Wittig had served about one year before being released on appeal.

June 18, 2008

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— A federal appeals court on Tuesday upheld a 24-month prison sentence for a former Westar Energy Inc. executive convicted in 2003 of bank fraud.

It was the third time the 10th U.S. Circuit Court of Appeals had considered the sentence against David Wittig, former chief executive of the Topeka-based utility. The three-judge panel based in Denver had earlier rejected sentences of 51 and 60 months as too harsh.

Wittig served a little over a year in prison before being released on appeal, meaning he likely would have to return to finish out his sentence. An attorney for Wittig didn't immediately return a phone call for comment Tuesday.

The panel in 2006 had recommended a sentence of no more than six months, but said in its ruling that U.S. District Judge Julie Robinson provided adequate reasoning that a longer sentence was required because of the seriousness of the crime and because Wittig's co-defendant was sentenced to five years in prison even though they were convicted of similar crimes.

"Though a 24-month sentence was certainly not the only reasonable sentence the district court could have arrived at, we discern no abuse of discretion," the court said.

Wittig also was sentenced to three years of probation with a number of conditions, including one preventing him from serving as a corporate executive or engaging in any financial agreements or negotiations without court approval.

The court overruled that condition as unreasonable, saying that Wittig's crimes were committed in his personal life, not as part of his job at Westar.

Wittig was convicted in July 2003 of loaning $1.5 million to former Topeka bank President Clinton Odell Weidner II, then helping him hide the transaction from bank and federal officials.

Prosecutors say Weidner extended Wittig's line of credit at Capital City Bank in 2001 by $1.5 million and Wittig then loaned the money back to Weidner so the banker could invest in an Arizona real estate deal.

They claim Wittig loaned the money in exchange for Weidner's future help providing loans to Wittig and other Westar officials wanting to invest in the proposed spin-off of the company's unregulated businesses. Kansas regulators eventually nixed the deal, which could have garnered an estimated $30 million to $60 million for Wittig.

The appeals court upheld the convictions against Wittig but threw out the prison sentences, saying calculations used to determine the sentences were flawed and the sentences were far longer than guidelines allow.

The panel said the maximum penalty Wittig could receive under federal sentencing guidelines was six months in prison. The guidelines are not mandatory, but judges are required to justify departing from them.

Robinson went above those guidelines in February 2007, sentencing Wittig to two years. She said a six-month term "failed to reflect the seriousness of the offense."

Wittig spent more than a year behind bars in 2006 after Robinson determined he violated conditions of his release on appeal.

The case is separate from charges alleging that Wittig and former Westar strategy officer Douglas Lake conspired to circumvent internal controls at the utility to bulk up their compensation and hide it from shareholders. A trial on those charges is scheduled to begin in September.

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