Etheredge says he 'absolutely' did not lie to theme park investors
11/05/2010 10:22 PM
11/05/2010 10:22 PM
Defense attorney Steve Joseph had spent nearly 10 1/2 hours over the last two days questioning his client, Wild West World founder Thomas Etheredge.
As Joseph was wrapping up his direct examination Thursday afternoon, he had two final questions that went to the went to the heart of the matter in Etheredge's securities fraud trial in Sedgwick County District Court:
"Did you intentionally lie to any of the investors so they would give you money for Wild West World?" Joseph asked.
"Absolutely not," Etheredge said.
"Did you ever intentionally conceal any fact in order to get investors to give you money for Wild West World?" Joseph asked.
"Absolutely not," Etheredge said.
Etheredge also testified that it was never his plan to take on private investors for the failed theme park.
He said he and his wife, Cheryl, had determined "not to go with private investors because of this SEC issue. We had our bank financing in place."
Seven investors are listed on the nine counts of charges against Etheredge, whose theme park in Park City remained open for only two months before closing and going bankrupt in July 2007.
Rob and Angel Dillard gave Etheredge $300,000 — $200,000 in July 2006 and $100,000 the next month. Like most of the investors, the Dillards attended Summit Church with Etheredge.
Etheredge, under questioning from Joseph, testified that he had lunch one day with Rob Dillard — someone Etheredge described as his "prayer partner" — and was sharing the general needs for constructing the theme park and that some bills were coming due. A few days later, he said the Dillards delivered a check to him for $200,000.
"I said, 'You're kidding.' " Etheredge testified. "We had financed (the theme park) all ourselves. We never intended to get money from others. It took me aback.''
As for the Dillards' check for $100,000, Etheredge testified that he had an agreement with the Dillards that if he had further needs for the park he'd let them know. That need arose, so he said he told the Dillards.
"I had given my word to Rob and Angel that I'd give them the first opportunity," Etheredge said. "I told them, 'This is the need. You don't have to tell me now. Pray about (giving the money) and get back with me.' "
In earlier testimony, Angel Dillard said Etheredge approached them about giving him more money in order to protect their original $200,000 investment. She said he "sounded desperate."
Other approached him about investing in Wild West World, Etheredge testified.
He said that "word got out" around Summit Church, which was located at Wild West World, that the Dillards had invested in the park and others wanted to do the same.
"I had people coming up to me," Etheredge said. "This not a pie-in-the-sky by this time. Building was taking place People knew it was going to open soon."
Etheredge said he had about $8 million in loans from a consortium of banks, led by the First National Bank of Southern Kansas in Mount Hope. But he said he had "millions of dollars" in loans from banks in Europe to help finance rides at the park.
"Banks in the United States don't usually fund theme park rides because of liabilities," Etheredge testified. "Banks in Europe do."
Joseph also questioned Etheredge about his no-contest plea in 1987 to the nine counts of securities fraud in Kansas. The case was the result the collapse of Bethany Trust, the banking operation that Etheredge started in 1984 in Pampa, Texas.
Besides the nine counts in Kansas, there were six in Missouri.
As part of a plea agreement between the Wyandotte County District Attorney's Office and the Missouri assistant attorney general, Etheredge entered an Alford plea to two of the six Missouri charges.
"What is an Alford plea?" Joseph asked.
"Basically that meant that position of believing I was not guilty was being entered," Etheredge said. "But nonetheless, the court was sentencing me."
"So you pled guilty in Missouri?" Joseph asked.
"Yes," Etheredge said.
"But you claim you weren't guilty?" Joseph asked.
"Absolutely," Etheredge said.
In fact, Etheredge has maintained he was innocent of all the charges.
That was brought out again Thursday when Joseph asked him why he didn't pay more than $750,000 in restitution to investors in the Bethany Trust, even though he wasn't required to do so because he spent three years in prison.
"Did you feel a moral obligation to pay it?" Joseph asked.
"No, sir," Etheredge said.
"Why not?" Joseph asked.
"I didn't cheat anyone," Etheredge said.
Kansas Securities Commissioner Chris Biggs, who is prosecuting the case, asked Etheredge about a resume he provided to First National Bank of Southern Kansas.
A sentence in that resume stated, "was convicted of SEC violations in regard to the bank's dealings in regard to non-registered securities."
Biggs asked Etheredge if he gave a letter with the resume attached to Greg Berry, who was executive vice president of the bank at the time.
"Mr. Biggs, you're not being truthful," Etheredge replied. "You're not telling the whole story."
Judge Ben Burgess interrupted the exchange: "Mr. Etheredge, that calls for a yes or no answer."
Etheredge then answered the question by saying, "I don't know that I gave that letter to Mr. Berry."