Credit Union's King Says He Doubts Charge - Dec 12, 1988 - Omaha World-Herald
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Dec 12, 1988 Credit Union's King Says He Doubts Charge; [Metro Edition] Paul Goodsell. Omaha World - Herald. Omaha, Neb. pg. 13
Full Text (498 words)
(Copyright 1988 Omaha World-Herald Company)
Lawrence E. King Jr., accused in a lawsuit of taking $34 million from the Franklin Community Federal Credit Union, said Sunday that he questions whether all of the money is missing at all.
"I don't think there's that much money missing - if there's money missing," said King, chief executive of the closed credit union. "I believe in my staff."
The National Credit Union Administration filed a $34 million lawsuit last month alleging that, under King's direction, Franklin sold certificates of deposit to investors but did not record them on the credit union's books. King later used the money on personal and business expenditures, the lawsuit alleged.
Since the lawsuit was filed, the NCUA has said that certificate holders have filed $34 million in claims and another $3 million in claims is expected. The credit union's books showed total assets of $2.5 million.
NCUA officials said last week that they have begun payments to certificate holders from the agency's $2 billion insurance fund. Officials contacted Monday declined to say how much has been paid to depositors so far.
Last week, King denied the lawsuit's allegations in a one-page court document. Earlier, when federal regulators first alleged that there were unrecorded certificates, King had suggested that authorities were misreading Franklin's computer records.
Sunday, King said he suspects that the Franklin case involves more than the certificate of deposit allegations. He declined to be specific, but noted that FBI and Internal Revenue Service agents converged on the credit union when the NCUA closed it Nov. 4.
"Just think about that," King said. "I don't think they came there looking for missing money. Those strong-arm tactics weren't needed."
Asked who might be responsible for mishandling the money, King said: "Look for the people who've been hiding." He would not give any names.
His attorney, William Morrow, also declined to elaborate. But regarding the Nov. 4 closing, Morrow said an NCUA official has told him that the raid was "coordinated at the FBI and IRS's request."
King was interviewed while catering a dinner at the North Christ Child Center, attending to details such as the heat of food on the serving line and the supply of plastic forks.
Although neither King nor his King Co. catering firm sponsored the event, he said he arranged for food donations from Calvin Memorial Presbyterian Church and the Frontiers International service club.
King said it is difficult to remain active in community activities because of his legal troubles, but he said he has found ways to do so.
"I've been here," he said. "I haven't been hiding."
Morrow said King's continued involvement in the community doesn't fit the picture of a man accused of diverting large amounts of money. If King had taken the money, Morrow said, he might have been expected to flee.
Asked about King's recent efforts to sell or transfer furniture, jewelry and property, Morrow said: "Obviously, he's trying to get money together to pay his lawyers."Credit: World-Herald Staff Writer