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Ex-Westar execs indicted for fraud

/ Source: The Associated Press

Two former executives of Westar Energy Inc. face dozens of charges alleging they stole millions of dollars from the utility and destroyed evidence to try to cover up the crimes, federal officials said Thursday.

A federal grand jury in Kansas returned indictments against former Westar chief executive officer David Wittig and former executive vice president Douglas Lake.

The indictments alleges Wittig and Lake “sought to systematically loot Westar of money and assets” and hindered the grand jury’s investigation by deleting or destroying records.

Federal authorities are seeking the return of $25 million from Wittig and $7 million from Lake, money prosecutors say was derived from illegal activities.

Acting Deputy Attorney General James Comey and Kansas U.S. Attorney Eric Melgren planned a news conference in Washington to discuss the charges.

Wittig and Lake each are charged with one count of conspiracy to defraud Westar; 14 counts of circumventing internal accounting controls and falsifying books and records; eight counts of wire fraud; 10 counts of submitting false statements; and six counts of engaging in monetary transactions derived from unlawful activity.

The charges carry penalties ranging from five to 20 years.

Wittig was indicted last year and convicted this year on federal fraud charges unrelated to Westar’s business. Wittig resigned as Westar’s chairman, president and CEO a year ago to defend himself against those charges.

In May, Westar’s board of directors issued a 376-page report charging that Wittig sought to enrich himself, tried to stifle dissent within the company and misused corporate aircraft. The report also accused Wittig of having aircraft flight logs falsified.

James Haines, Westar’s chief executive, said in August that he did not expect any more federal charges stemming from the investigations, though the company was continuing to supply information to authorities.

Westar is Kansas’ largest electric company, serving about 640,000 business and residential customers.