Jury Orders Westar Executives to Turn Over Millions in Fraud Case

David Twiddy
The Associated Press
September 19, 2005

A federal jury on Thursday ordered two former Westar Energy Inc. executives convicted of looting the utility to relinquish millions of dollars in cash and assets. Former CEO David Wittig was told to hand over his Topeka, Kan., home, thousands of shares of stocks, a life insurance policy and $9.7 million in bonuses and other payments made while he worked at Westar, the state's largest electric utility.

His co-defendant, former chief strategy officer Douglas Lake of New Canaan, Conn., was ordered to turn over $2.5 million in stock dividends and sales, as well as several thousand stock shares. Both men also must forfeit any award they receive from an ongoing arbitration fight they're having with Westar over pay and benefits they say the company still owes them.

Prosecutors had sought $27.9 million from Wittig and $9.4 million from Lake, including all the salary and benefits they had received before being forced out of the company in late 2002. U.S. Attorney Eric Melgren, whose office prosecuted the case, had little comment on the verdict, beyond commending attorneys and investigators in the case.

Lake's attorney, Edward Little, said "we're obviously still disappointed in the main verdict and will vigorously appeal that to the 10th Circuit (Court of Appeals)." Wittig's attorney, Adam Hoffinger, didn't return a phone call seeking comment.

Jurors convicted the men of 39 counts, including conspiracy, wire fraud, money laundering and circumventing internal controls, part of a scheme prosecutors said was aimed at looting the company.

Sentencing was set for Jan. 9. The men face up to five years each for the conspiracy count, 10 years for each count of circumventing internal controls, 20 years for each count of wire fraud and 10 years for each count of money laundering.

Labels: money laundering