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King: No Franklin Funds Paid for Lavish Lifestyle, Law Firm Allowed To Quit the Kings - Mar 23, 1989 - Omaha World-Herald

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Mar 23, 1989 King: No Franklin Funds Paid for Lavish Lifestyle, Law Firm Allowed To Quit the Kings; [Sunrise Edition] Omaha World - Herald. Omaha, Neb. pg. 17

Full Text (748 words)
(Copyright 1989 Omaha World-Herald Company)

Two stories on one Basis record.

Lawrence E. King Jr. said Wednesday that he financed his affluent lifestyle with about $200,000 in annual income from his businesses, not money from the failed Franklin Community Federal Credit Union that he ran.

King also said in an interview with WOWT-TV of Omaha that racism has played a role in allegations that he diverted $34 million from the credit union for his personal and business use.

"If I were white, this would not be happening to me," King said. "There are many people I think they should be looking at and investigating, and they are not. It seems Larry King is the target . . ."

King declined to name others who should be investigated in connection with the credit union's collapse.

King, who contributed more than $37,000 to Republican causes and candidates in 1987-88, was manager and treasurer of the credit union.

'Sensationalism'

No criminal charges have been filed against him. He has been named as the defendant in a $34 million lawsuit filed by the National Credit Union Administration. A second suit filed by the NCUA seeks to recover $3 million from King's wife, Alice, alleging she received some of the Franklin funds.

The credit union failed Nov. 4, 1988, and authorities discovered $38 million was missing.

King asked The Omaha World-Herald Tuesday to stop writing "sensational" news stories about him. He said the newspaper was writing "trash and garbage" about his wealth and activities "without any regard to its validity."

In the interview with WOWT, King said his lifestyle was due in part to his catering business, King Catering Co.

"I think that the rumor was out that Larry King had a high lifestyle. When you are caterers, you live a high lifestyle," he said.

"I'm at a lot of parties. I do a lot of things. You try to make yourself and your business as visible as possible . . . I think a lot of this is just - I say conjecture and assumptions - but a lot of it is jealousy."

'About This Jewelry'

King, who no longer is represented by a lawyer in the case, disputed reports he owned a $65,000 watch and expensive jewelry with large stones.

"I guarantee it wasn't $65,000. And then I hear about all this jewelry that I was supposed to - I had big jewelry because I have big hands and I'm a big person. But it was not precious stones, it was semi-precious stones. I can tell you they were blue sapphires. It wasn't anything of any great (value)," he said in the television interview.

"My money didn't come from Franklin. In fact, my salary may have been $18,000 a year," he said. "My money came from my businesses, and once they go through the records and see the money that the businesses made, they will see that the businesses did make money. I made an income that surpassed what they are saying."

"The lifestyle I live I paid for. I can tell you I felt that I made over $200,000 a year. I had - we had - other money, too . . . My wife's family. But I don't want to go into that in any detail," he said.

King's businesses included restaurants and a nightclub that booked national jazz and blues acts.

A federal grand jury has been investigating the Franklin failure.

Law Firm Allowed To Quit the Kings

The Omaha law firm of Erickson & Sederstrom may withdraw as attorney for Lawrence E. King Jr., chief executive of the failed Franklin Community Federal Credit Union, and his wife, Alice, a federal judge said Wednesday afternoon.

U.S. District Judge William Cambridge signed an order approving the law firm's request to withdraw as attorney for the Kings.

The withdrawal request was part of an agreement with other law firms and parties involved in civil lawsuits filed against the Kings and a Franklin affiliate by the National Credit Union Administration. NCUA is seeking to recover $38 million which it said King diverted from the credit union to his own personal and business uses.

As part of the agreement reached March 13, court-appointed receivers relinquished any claims they might have to the Kings' suburban north Omaha home in favor of Erickson & Sederstrom, and the law firm relinquished any of its claims to stock in businesses operated by King and the title to 20 acres of property adjacent to King's home.

The terms of those agreements also were approved in another order signed by Cambridge.

Credit: AP

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