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Monday, March 01, 2004 5:52:21 PM
Weidner sentenced to 6 years in fraud case
By Steve Fry
The Capital-Journal
Former Topeka banking executive Clinton Odell "Del" Weidner II was sentenced today to six years, six months on each of six counts for convictions of conspiring to hide a bank loan.
The judge handed down the sentence at about 2:15 p.m. today. The sentences are to run concurrently, meaning Weidner won't spend more than six years, six months in prison.
U.S. District Court Judge Julie Robinson declined to impose fines on Weidner. She allowed him to remain free and will let him voluntarily surrender to a federal correctional facility.
At the defendant's request, Robinson will recommend to the U.S. Bureau of Prisons that Weidner be housed at a federal correctional facility in Yankton, S.D.
However, Robinson rejected Weidner's request to remain free on bail pending appeal of his case.
Weidner made a sometimes emotional statement during the sentencing. He apologized to his family, his girlfriend, her children and his supporters. About 25 family members and friends were in the courtroom during the last hour of the sentencing today.
Weidner takes the stand
Weidner climbed into the witness stand late this morning to testify about what happened to thousands of dollars worth of antique cars, a gun collection and artwork.
Photo by Ann Williamson/The Capital-Journal
Del Weidner closes his eyes as he listens to his girlfriend, Carol Reynolds, talk with the news media following his sentencing today at the Frank Carlson Federal Courthouse in Topeka. Weidner was sentenced to six years, six months in prison.Weidner became a witness after an FBI agent testified that a number of cars purchased by Weidner had never been titled or tagged, and there is no record of Weidner selling the vehicles.
At one point in response to questions by Richard Hathaway, senior litigation counsel for the U.S. attorney's office, Weidner said he had never owned a red 1964 Mercedes Benz. But he quickly reversed himself, saying he had purchased the car from Frank Sabatini, owner of Capital City Bank, and now the car is in his garage.
"So you lied under oath?" Hathaway said.
"Yes. I did," Weidner said.
Robinson presided over the sentencing today of Weidner for convictions of six felonies in a bank fraud case. Weidner and David Wittig, 48, former chief executive officer, president and chairman of the board of Westar Energy were convicted on July 14 of conspiring to hide a $1.5 million loan from federal regulators.
Weidner's testimony this morning came in response to a contention by federal prosecutors that Weidner was trying to hide his financial assets.
Weidner this morning said a financial statement dated May 31, 2001, submitted to Capital City Bank showed that he had a car collection valued at $160,000.
Weidner's statement
:: Weidner's full statement to the judge
From start to finish
This timeline chronicles events that ended with Del Weidner's sentencing today.
October 1994 -- Weidner becomes president of Capital City Bank.
April 3, 2001 -- Weidner tells Wittig about a $1.5 million investment in a an Arizona real estate project. Wittig declines but agrees to loan Weidner the money if Weidner extends Wittig's credit line by $1.5 million.
April 30, 2001 -- Weidner approves a $1.5 million extension to Wittig's $3.5 million line of credit at Capital City Bank. Weidner wires $1.5 million to provide down payment for the real estate project.
March 16, 2002 -- The true nature of the loan was discovered by Capital City Bank. Weidner is placed on administrative leave.
Nov. 7, 2002 -- A federal grand jury charges Wittig and Weidner each with seven crimes linked to the case.
June 30, 2003 -- Weidner pleads guilty to two of the crimes.
July 14, 2003 -- Wittig and Weidner are convicted of the other crimes by a jury, which also rules Weidner must forfeit any "real property" linked to the loan.
Feb. 26, 2004 -- Weidner is sentenced to six years, six months in prison.
Recent stories
:: Feb. 26, 2004 -- Weidner to be sentenced today
:: Feb. 24, 2004 -- Wittig pleads for leniency
:: Feb. 22, 2004 -- Wittig, Weidner likely face prison
:: Jan. 27, 2004 -- Prosecutors seek forfeiture
Story archives
:: Past stories in the case
CONVICTIONS
A U.S. District Court jury on July 14, 2003, returned guilty verdicts against Weidner and Wittig.
Clinton Odell "Del" Weidner II, 50, of Topeka:
• Conspiracy
• Two counts of filing false bank entries
• Money laundering
• Two guilty pleas before the trial began to two other counts of filing false bank entries
• Ordered to forfeit the proceeds from the Arizona land deal
David C. Wittig, 48, of Topeka:
• Conspiracy
• Four counts of filing false bank entries
• Money laundering
In July 2002, another Weidner financial statement showed he had cars, artwork, guns and a Harley-Davidson motorcycle, all valued at $250,000.
Hathaway questioned Weidner closely about the sale of a 1995 Porsche about six or seven years ago to Fritz Reynolds, a former broadcast executive. Weidner earlier had said he didn't keep any paperwork, including bills of sale, that reflected the sales of his cars. Weidner said he didn't recall how much Reynolds paid him for the Porsche.
Hathaway placed a document in front of Weidner, which showed the car's title was still registered to the man that Weidner had purchased it from. The title didn't have Weidner's name on it.
"Does the figure $50,000 ring a bell?" Hathaway asked.
Weidner said he didn't recall how much it sold for.
"I don't know if it was more than 50 or less than 50," Weidner said. "I don't know."
Hathaway showed a bill of sale for the car to Weidner. He asked Weidner whether it showed the earlier owner as the seller of the car to Reynolds.
"I don't know," Weidner said.
Hathaway pointed out that the bill of sale bore a notarization by Christy Gurney, who worked as Weidner's secretary for eight years. Weidner said he didn't recall the bill of sale, which showed the car was sold for $28,500.
"You sold it for substantially more than that?" Hathaway asked.
"I don't recall, Mr. Hathaway," Weidner said.
Weidner testified he gave Fritz Reynolds, a "blank bill of sale." After his testimony, Robinson said "this is all very interesting."
She said what's more important to the court is that Weidner was instructed to turn over accurate information to the presentence report writer, a federal investigator who compiles information to help determine what sentence a defendant is to receive.
The judge said that if she had to, she would put the presentence writer on the witness stand to testify about his efforts to get information about the cars from Weidner.
"I wonder what is going on here," Robinson said, adding that there is an allegation that Weidner impeded the collection of information by the presentence investigation writer.
"It's looking more and more like that's what's going on here," Robinson said.
Judge enhances sentence
When the case resumed at 12:30 p.m. following a lunch break, Robinson denied a series of objections by Weidner to the presentence investigation writer's report.
She said she would enhance Weidner's sentence by two levels based on his obstruction of information to the court about his financial statement. Robinson said she also would enhance his sentence because the gross loss was more than $1 million, referring to the $1.5 million loan between the men.
The defendants could reasonably see a "pecuniary harm" in the deal, she said. Weidner had contended there would be no loss to the bank due to Wittig's worth, but Wittig wouldn't have paid back the loan to the bank, Robinson said, because it was Weidner's loan. The bank was repaid.
The judge noted that Weidner couldn't afford the payments on the loan and had to get help from third parties to repay his loan. At times, the judge lectured Weidner about nominee loans -- loans one person takes out in the name of another person. Robinson emphatically told Weidner that nominee loans are illegal.
"Capital City Bank was a victim," Robinson said, adding she didn't know whether it showed Weidner's arrogance that he didn't acknowledge the bank was a victim.
"He really doesn't get it," she said.
Robinson said the rules are designed to uphold the public's confidence in the banking industry and to assure that bank officers won't be "self-dealing." Robinson lectured Weidner about banking ethics and full disclosure, saying "self-dealing" doesn't belong in the banking industry.
Forfeiture from land deal
Earlier in the morning, Robinson ruled that a company in which Weidner was a partner must forfeit up to $1.5 million set aside in an escrow account. Weidner is half owner of Arizona-based Scottsdale Sierra Eagle Ridge LLC.
The judge's first ruling came shortly after the 9 a.m. start of the court proceedings this morning. Robinson denied a motion for acquittal and a new trial for both Weidner, 50, and David Wittig, 48, former chief executive officer, president and chairman of the board of Westar Energy.
Wittig is to be sentenced on Friday in Kansas City, Kan.
Robinson said she had planned to begin the sentencing portion of this morning's proceedings directly after making the forfeiture ruling. Attorneys for Weidner said they thought the forfeiture portion would take longer, and told witnesses to arrive at the Frank Carlson Federal Building by 1:30 p.m.
Weidner and Wittig were convicted on July 14 of conspiring to hide a $1.5 million loan from federal regulators. Weidner, who was Wittig's banker, approved a $1.5 million extension to Wittig's line of credit at Capital City Bank. The money then was moved by wire transfer to Weidner for him to invest in Scottsdale Sierra Ridge LLC's upscale Eagle Ridge housing developing near Scottsdale, Ariz.
The $1.5 million Wittig loaned Weidner later was repaid by Topeka investigator Jack McGivern, who then received Weidner's interest in the Eagle Ridge development.
The jury that convicted Wittig and Weidner also ruled in July that Weidner should forfeit any "real property" linked to the $1.5 million loan. Robinson ruled today that the money would be forfeited from an escrow account set up by Scottsdale Sierra Eagle Ridge LLC in April 2003.
Wittig and his attorneys also were in the courtroom today. Wittig entered the federal building's lower level at about 8 a.m., then went into a room adjacent to the courtroom at about 8:35 a.m.
Accompanied by his attorneys, the former Westar chief sat behind Weidner's defense attorneys.
Weidner exited the fourth-floor elevators at about 8:40 a.m. with girlfriend Carol Reynolds and her son, then entered the courtroom minutes later. About 10 minutes before court proceedings were to begin, Weidner led Reynolds and her son to a corner in the courtroom's public-viewing area and spoke with them privately.
Decked out in a dark-blue suit, Weidner sat solemnly in the front row of the courtroom's public area while Robinson poured over facts in the case. His hands were folded and his legs crossed.
Robinson said she also planned to sentence Wittig today, though his sentencing was delayed because Wittig's attorneys didn't plan on the sentencing occurring today.
Capital-Journal reporters Tim Richardson and Tim Hrenchir contributed to this report.
http://www.cjonline.com/stories/022604/bre_weidner.shtml
By Steve Fry
The Capital-Journal
Former Topeka banking executive Clinton Odell "Del" Weidner II was sentenced today to six years, six months on each of six counts for convictions of conspiring to hide a bank loan.
The judge handed down the sentence at about 2:15 p.m. today. The sentences are to run concurrently, meaning Weidner won't spend more than six years, six months in prison.
U.S. District Court Judge Julie Robinson declined to impose fines on Weidner. She allowed him to remain free and will let him voluntarily surrender to a federal correctional facility.
At the defendant's request, Robinson will recommend to the U.S. Bureau of Prisons that Weidner be housed at a federal correctional facility in Yankton, S.D.
However, Robinson rejected Weidner's request to remain free on bail pending appeal of his case.
Weidner made a sometimes emotional statement during the sentencing. He apologized to his family, his girlfriend, her children and his supporters. About 25 family members and friends were in the courtroom during the last hour of the sentencing today.
Weidner takes the stand
Weidner climbed into the witness stand late this morning to testify about what happened to thousands of dollars worth of antique cars, a gun collection and artwork.
Photo by Ann Williamson/The Capital-Journal
Del Weidner closes his eyes as he listens to his girlfriend, Carol Reynolds, talk with the news media following his sentencing today at the Frank Carlson Federal Courthouse in Topeka. Weidner was sentenced to six years, six months in prison.Weidner became a witness after an FBI agent testified that a number of cars purchased by Weidner had never been titled or tagged, and there is no record of Weidner selling the vehicles.
At one point in response to questions by Richard Hathaway, senior litigation counsel for the U.S. attorney's office, Weidner said he had never owned a red 1964 Mercedes Benz. But he quickly reversed himself, saying he had purchased the car from Frank Sabatini, owner of Capital City Bank, and now the car is in his garage.
"So you lied under oath?" Hathaway said.
"Yes. I did," Weidner said.
Robinson presided over the sentencing today of Weidner for convictions of six felonies in a bank fraud case. Weidner and David Wittig, 48, former chief executive officer, president and chairman of the board of Westar Energy were convicted on July 14 of conspiring to hide a $1.5 million loan from federal regulators.
Weidner's testimony this morning came in response to a contention by federal prosecutors that Weidner was trying to hide his financial assets.
Weidner this morning said a financial statement dated May 31, 2001, submitted to Capital City Bank showed that he had a car collection valued at $160,000.
Weidner's statement
:: Weidner's full statement to the judge
From start to finish
This timeline chronicles events that ended with Del Weidner's sentencing today.
October 1994 -- Weidner becomes president of Capital City Bank.
April 3, 2001 -- Weidner tells Wittig about a $1.5 million investment in a an Arizona real estate project. Wittig declines but agrees to loan Weidner the money if Weidner extends Wittig's credit line by $1.5 million.
April 30, 2001 -- Weidner approves a $1.5 million extension to Wittig's $3.5 million line of credit at Capital City Bank. Weidner wires $1.5 million to provide down payment for the real estate project.
March 16, 2002 -- The true nature of the loan was discovered by Capital City Bank. Weidner is placed on administrative leave.
Nov. 7, 2002 -- A federal grand jury charges Wittig and Weidner each with seven crimes linked to the case.
June 30, 2003 -- Weidner pleads guilty to two of the crimes.
July 14, 2003 -- Wittig and Weidner are convicted of the other crimes by a jury, which also rules Weidner must forfeit any "real property" linked to the loan.
Feb. 26, 2004 -- Weidner is sentenced to six years, six months in prison.
Recent stories
:: Feb. 26, 2004 -- Weidner to be sentenced today
:: Feb. 24, 2004 -- Wittig pleads for leniency
:: Feb. 22, 2004 -- Wittig, Weidner likely face prison
:: Jan. 27, 2004 -- Prosecutors seek forfeiture
Story archives
:: Past stories in the case
CONVICTIONS
A U.S. District Court jury on July 14, 2003, returned guilty verdicts against Weidner and Wittig.
Clinton Odell "Del" Weidner II, 50, of Topeka:
• Conspiracy
• Two counts of filing false bank entries
• Money laundering
• Two guilty pleas before the trial began to two other counts of filing false bank entries
• Ordered to forfeit the proceeds from the Arizona land deal
David C. Wittig, 48, of Topeka:
• Conspiracy
• Four counts of filing false bank entries
• Money laundering
In July 2002, another Weidner financial statement showed he had cars, artwork, guns and a Harley-Davidson motorcycle, all valued at $250,000.
Hathaway questioned Weidner closely about the sale of a 1995 Porsche about six or seven years ago to Fritz Reynolds, a former broadcast executive. Weidner earlier had said he didn't keep any paperwork, including bills of sale, that reflected the sales of his cars. Weidner said he didn't recall how much Reynolds paid him for the Porsche.
Hathaway placed a document in front of Weidner, which showed the car's title was still registered to the man that Weidner had purchased it from. The title didn't have Weidner's name on it.
"Does the figure $50,000 ring a bell?" Hathaway asked.
Weidner said he didn't recall how much it sold for.
"I don't know if it was more than 50 or less than 50," Weidner said. "I don't know."
Hathaway showed a bill of sale for the car to Weidner. He asked Weidner whether it showed the earlier owner as the seller of the car to Reynolds.
"I don't know," Weidner said.
Hathaway pointed out that the bill of sale bore a notarization by Christy Gurney, who worked as Weidner's secretary for eight years. Weidner said he didn't recall the bill of sale, which showed the car was sold for $28,500.
"You sold it for substantially more than that?" Hathaway asked.
"I don't recall, Mr. Hathaway," Weidner said.
Weidner testified he gave Fritz Reynolds, a "blank bill of sale." After his testimony, Robinson said "this is all very interesting."
She said what's more important to the court is that Weidner was instructed to turn over accurate information to the presentence report writer, a federal investigator who compiles information to help determine what sentence a defendant is to receive.
The judge said that if she had to, she would put the presentence writer on the witness stand to testify about his efforts to get information about the cars from Weidner.
"I wonder what is going on here," Robinson said, adding that there is an allegation that Weidner impeded the collection of information by the presentence investigation writer.
"It's looking more and more like that's what's going on here," Robinson said.
Judge enhances sentence
When the case resumed at 12:30 p.m. following a lunch break, Robinson denied a series of objections by Weidner to the presentence investigation writer's report.
She said she would enhance Weidner's sentence by two levels based on his obstruction of information to the court about his financial statement. Robinson said she also would enhance his sentence because the gross loss was more than $1 million, referring to the $1.5 million loan between the men.
The defendants could reasonably see a "pecuniary harm" in the deal, she said. Weidner had contended there would be no loss to the bank due to Wittig's worth, but Wittig wouldn't have paid back the loan to the bank, Robinson said, because it was Weidner's loan. The bank was repaid.
The judge noted that Weidner couldn't afford the payments on the loan and had to get help from third parties to repay his loan. At times, the judge lectured Weidner about nominee loans -- loans one person takes out in the name of another person. Robinson emphatically told Weidner that nominee loans are illegal.
"Capital City Bank was a victim," Robinson said, adding she didn't know whether it showed Weidner's arrogance that he didn't acknowledge the bank was a victim.
"He really doesn't get it," she said.
Robinson said the rules are designed to uphold the public's confidence in the banking industry and to assure that bank officers won't be "self-dealing." Robinson lectured Weidner about banking ethics and full disclosure, saying "self-dealing" doesn't belong in the banking industry.
Forfeiture from land deal
Earlier in the morning, Robinson ruled that a company in which Weidner was a partner must forfeit up to $1.5 million set aside in an escrow account. Weidner is half owner of Arizona-based Scottsdale Sierra Eagle Ridge LLC.
The judge's first ruling came shortly after the 9 a.m. start of the court proceedings this morning. Robinson denied a motion for acquittal and a new trial for both Weidner, 50, and David Wittig, 48, former chief executive officer, president and chairman of the board of Westar Energy.
Wittig is to be sentenced on Friday in Kansas City, Kan.
Robinson said she had planned to begin the sentencing portion of this morning's proceedings directly after making the forfeiture ruling. Attorneys for Weidner said they thought the forfeiture portion would take longer, and told witnesses to arrive at the Frank Carlson Federal Building by 1:30 p.m.
Weidner and Wittig were convicted on July 14 of conspiring to hide a $1.5 million loan from federal regulators. Weidner, who was Wittig's banker, approved a $1.5 million extension to Wittig's line of credit at Capital City Bank. The money then was moved by wire transfer to Weidner for him to invest in Scottsdale Sierra Ridge LLC's upscale Eagle Ridge housing developing near Scottsdale, Ariz.
The $1.5 million Wittig loaned Weidner later was repaid by Topeka investigator Jack McGivern, who then received Weidner's interest in the Eagle Ridge development.
The jury that convicted Wittig and Weidner also ruled in July that Weidner should forfeit any "real property" linked to the $1.5 million loan. Robinson ruled today that the money would be forfeited from an escrow account set up by Scottsdale Sierra Eagle Ridge LLC in April 2003.
Wittig and his attorneys also were in the courtroom today. Wittig entered the federal building's lower level at about 8 a.m., then went into a room adjacent to the courtroom at about 8:35 a.m.
Accompanied by his attorneys, the former Westar chief sat behind Weidner's defense attorneys.
Weidner exited the fourth-floor elevators at about 8:40 a.m. with girlfriend Carol Reynolds and her son, then entered the courtroom minutes later. About 10 minutes before court proceedings were to begin, Weidner led Reynolds and her son to a corner in the courtroom's public-viewing area and spoke with them privately.
Decked out in a dark-blue suit, Weidner sat solemnly in the front row of the courtroom's public area while Robinson poured over facts in the case. His hands were folded and his legs crossed.
Robinson said she also planned to sentence Wittig today, though his sentencing was delayed because Wittig's attorneys didn't plan on the sentencing occurring today.
Capital-Journal reporters Tim Richardson and Tim Hrenchir contributed to this report.
http://www.cjonline.com/stories/022604/bre_weidner.shtml
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