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Judge Names Second Receiver in Credit Union Scandal - Jan 20, 1989 - UPI Regional News


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Judge names second receiver in credit union scandal U.P.I. Regional News January 20, 1989, Friday, BC cycle

OMAHA U.S. District Judge William Cambridge named a receiver Friday for some property and all investments belonging to Alice King, who is named in a civil lawsuit stemming from the disgraceful failure of a credit union. Cambridge said the property and money are ''in danger of being lost, removed or materially injured.'' Omaha attorney Thomas D. Stalnaker was named receiver of ''all bonds, notes, evidences of debt, checks, drafts, receivables and accounts, shares of stock in corporations'' issued to King or held by another for her. Cambridge also named Stalnaker receiver of ''all furniture, fixtures and personal property of every kind that has been removed by defendant from property located at 2441 California St. N.W., Washington, D.C., and any and all jewelry in which defendant has an ownership interest in.''

Lawrence E. King Jr., husband of Alice and codefendant in the suit, leased the Washington house located near Embassy Row until he moved out in early November. Lawrence King is former executive director of the failed Franklin Community Federal Credit Union, from which federal regulators contend almost $40 million is missing. King allegedly diverted money from Franklin Community for personal and business use, said the $3 million lawsuit filed by the National Credit Union Administration. Mrs. King allegedly participated indirectly, it said.

Cambridge in November appointed attorney Keith I. Frederick as receiver for assets of Lawrence King. Allegations of sexual abuse and illegal drug use has surfaced in an investigation of Franklin Community by a special legislative committee. State Sens. Loren Schmit of Bellwood and Ernest Chambers of Omaha are committee chairman and vice chairman, respectively. Former CIA Director William Colby was interviewed Friday in Lincoln for a job as legal counsel to the committee. Schmit said five other candidates will be interviewed by the seven-member committee.


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