Franklin Accountant Told Feds King Didn't Take Money - Sep 15, 1989 - Omaha World-Herald
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Sep 15, 1989 Franklin Accountant Told Feds King Didn't Take Money; [Sunrise Edition]
David Thompson. Omaha World - Herald. Omaha, Neb. pg. 17
Full Text (601 words)
(Copyright 1989 Omaha World-Herald Company)
The chief accountant for Franklin Community Federal Credit Union told federal investigators a year before the institution failed that Lawrence E. King Jr. didn't take any money, according to testimony Thursday in a federal court hearing.
The accountant, E. Thomas Harvey, later cooperated with federal investigators and testified before a federal grand jury. The grand jury handed up a 40-count indictment for fraud and income tax evasion against King, the Franklin manager and treasurer, and a 12-count indictment against King's wife, Alice.
The indictment alleges that King was involved in the disappearance of $38 million from the credit union and that Mrs. King was involved in a conspiracy to take Franklin money.
Harvey and his mother, Mary Jane Harvey, both have pleaded guilty to embezzling $1 million from Franklin and evading federal income taxes.
The prosecution "has a statement from Tom Harvey in 1987 that King didn't do anything," First Assistant U.S. Attorney Thomas Thalken said during a hearing Thursday on defense attorneys' pretrial motions.
Thalken gave a copy of Harvey's 1987 statement to U.S. Magistrate Richard Kopf so the magistrate could read it in his office. The statement was sealed in a large envelope.
One of King's defense attorneys, Steven Achelpohl, said he thought some witnesses in the case made statements favorable to King before Franklin was closed last Nov. 4. Achelpohl said the Internal Revenue Service had been investigating the case for more than four years.
Achelpohl asked Kopf to order prosecutors to provide defense attorneys with statements from witnesses interviewed in the case so the defenders can prepare for trial.
A 1963 U.S. Supreme Court decision requires prosecutors to provide defense attorneys with material favorable to the defendant if they request it.
It is important that defense attorneys receive the information soon because some witnesses already have left Omaha, Achelpohl said.
Thalken said defense attorneys were using the 1963 decision to try to obtain information they might be entitled to only during the trial. A 1957 law permits the government to refuse to disclose statements made before trial until after the witness testifies at the trial.
Kopf said he did not have the power to order the government to give defense attorneys the material.
Achelpohl also asked the magistrate to allow defense attorneys in the criminal cases against the Kings to take some actions in civil lawsuits filed against the Kings. The National Credit Union Administration has sued King and his wife, seeking recovery of the $38 million that the NCUA said disappeared from Franklin.
The Kings do not have an attorney in the civil case and are representing themselves.
Kopf appointed Achelpohl and attorney Marilyn Abbott to represent King and named attorney Jerold Fennell to represent Mrs. King, but only in the criminal case.
May Jeopardize Position
Achelpohl said an attorney representing the government agency in the civil suits is seeking information from Achelpohl in the criminal case.
The defense attorney said that if he does not comply with the request, he might jeopardize King's position in the civil case. But if he complies, he said, he might jeopardize King's rights in the criminal case.
Kopf said he rejected Achelpohl's request "to make it clear" to the government attorneys in the civil case that their actions might frustrate the criminal case.
The magistrate also heard a request from Achelpohl, Ms. Abbott and Fennell to delay the start of the criminal trial for four months. They said they needed more time to gather information.
Kopf is expected to rule on the request later. The trial tentatively is scheduled to begin Dec. 1.Credit: World-Herald Staff Writer