photo by: Nick Krug

Thomas S. Fritzel stands behind one of his attorneys, Thomas Lemon, as he leaves the Frank Carlson Federal Courthouse in Topeka on Tuesday, Aug. 14, 2018.

Lawrence developer Thomas Fritzel is preparing to withdraw his not-guilty plea in a federal fraud case.

Fritzel and his bookkeeper, Keela Lam, then 52 and 46 respectively, were indicted in June 2018 on charges of scheming to collect more than $400,000 in fraudulent tax refunds from the City of Lawrence in relation to his development of The Oread hotel, 1200 Oread Ave. The case is set to go to trial Jan. 21, but Fritzel recently filed a notice of intent to change his plea.

Fritzel previously pleaded not guilty to felony conspiracy and tax fraud and has remained on release after posting a $50,000 bond. Fritzel filed a notice of intent to change his plea on Dec. 6, and a change of plea hearing has been set for Jan. 9, according to federal court records.

The Journal-World asked Fritzel’s attorneys via email Wednesday if Fritzel intends to change his plea to guilty and whether the upcoming change is in anticipation of a plea deal. Attorney Ed Novak did not provide any response other than to say he is not permitted to comment beyond the public filing.

Previous filings with the U.S. District Court indicate discussions to resolve the case without going to trial have been underway. On Nov. 7, Fritzel’s attorneys requested that filing deadlines in the case be extended because “defense counsel and the Government are in communication to discuss a resolution of the matter which would obviate the necessity of a trial.” The request states the extension was needed in order to further those discussions. Lam, who pleaded not guilty and is also free on release, also agreed to the extension in order to continue discussion to resolve the case without a trial.

Prosecutors allege Fritzel and Lam defrauded the city out of more than $400,000 in sales tax refunds by exploiting two special taxing districts the city had set up as part of the financing of The Oread hotel development.

Both Fritzel and Lam face up to 15 years in prison and hundreds of thousands in fines related to the charges. Specifically, Fritzel and Lam each face five years in prison and a $250,000 fine for conspiracy to commit fraud and 10 years in prison and a $250,000 fine for transporting stolen funds through interstate commerce, as the Journal-World previously reported. The indictment also charges a number of corporate entities that Fritzel and Lam controlled, which could be fined up to $500,000 each for their role in transporting stolen funds in interstate commerce.

The fraud case is a separate case from Fritzel’s felony conviction this summer related to illegal asbestos disposal at the former Alvamar Country Club, now known as the Jayhawk Club. On July 30, a jury took about two hours to find Fritzel guilty on three counts related to the disposal of asbestos-containing material during remodeling work at Alvamar in 2016. Fritzel was found guilty of knowingly failing to notify environmental agencies prior to removing asbestos material, knowingly failing to wet asbestos before removing it from the construction site and knowingly failing to dispose of asbestos waste in leak-tight containers.

Fritzel is facing up to seven years in federal prison and a fine of up to $500,000 in relation to the three asbestos disposal charges. Fritzel is scheduled to be sentenced in that case on Feb. 20, 2020.