Sunday, June 25, 2017

Employee: I Told Truth, Lost My Job - Feb 20, 1994 - Omaha World-Herald

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Feb 20, 1994 Employee: I Told Truth, Lost My Job; [Sunrise Edition] Omaha World - Herald. Omaha, Neb. pg. 10.B

Full Text (326 words)
(Copyright 1994 Omaha World-Herald Company)
The online version is longer than the published version.

Franklin employee Edward Hobbs says he was fired as a troublemaker in 1984 after telling the credit union's board of directors that Lawrence E. King Jr. was using the credit union's money to live "high on the hog."

The two sides in the National Credit Union Administration's lawsuit against two Omaha law firms and six lawyers express different views about a memo written by Hobbs 10 years ago.

In his memo to the Franklin Community Federal Credit Union board, Hobbs questioned whether "$27,000 charged to American Express and paid for by the credit union was for credit union business. I hardly call rings, furs, furniture and clothes credit union expenses."

Hobbs also said he had copies of documents and names of employees and ex-employees who would support his allegations.

An investigation on behalf of Franklin's board supposedly was conducted by Mary Jane Harvey, a trusted friend of King's who performed volunteer tasks for Franklin but wasn't a board member. She reported that the Hobbs allegations were untrue.

The board accepted her report and dismissed Hobbs.

The NCUA contends that the Hobbs memo would have taken on new meaning if any of several lawyers had later told the Franklin board about the IRS investigation of King or about the grand jury subpoena of Franklin records.

The board then might have taken action against King, and in so doing reduced Franklin's eventual losses, the NCUA said.

But Erickson & Sederstrom views the Hobbs memo as evidence that Franklin's board of directors had good reason as early as 1984 to suspect that King was bilking the credit union.

The board itself was to blame for not investigating further, Erickson & Sederstrom said.
Mrs. Harvey is serving a 46-month federal prison sentence for embezzlement from Franklin and income tax evasion. Her son, chief Franklin accountant E. Thomas Harvey Jr., is serving a 51-month federal sentence for embezzling and income tax evasion.

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