Terry Fox, other investors testify in Thomas Etheredge trial
01/27/2010 6:15 AM
08/08/2014 9:55 AM
Terry Fox saw Thomas Etheredge as a business icon.
In fact, the Summit Church pastor twice described Etheredge that way during his testimony Tuesday in the securities fraud trial of the founder of Wild West World.
"When I moved to Kansas," Fox said, "all I heard about was the Prairie Rose (Chuckwagon Supper) and how successful it was.
"Every time I turned around he was being honored as a successful businessman. Thomas was an icon."
That factor, plus having heard Etheredge's testimony that he was a Christian and having known him as his pastor at two churches, convinced Fox that he should invest $50,000 in Wild West World.
Fox believed so much in Etheredge and the theme park that he even was willing to take a 30 percent penalty for withdrawing $30,000 from a retirement annuity.
He said he wasn't concerned about the penalty because of the return Etheredge said he would get for his money.
Fox said Etheredge told him he had two options for the return: doubling it by taking the return at the end of the park's season, or leaving the money in the park as an investment and receive dividends based on how the park did.
"It sounded like a very good investment," Fox testified in Sedgwick County District Court. "I never had an offer like that.
"We also believed in the vision of the park, excited about what the park would bring to our community."
Chris Biggs, Kansas securities commissioner and one of the prosecutors, asked Fox whether such a large return on his money "caused you to pause" about making the investment.
"At the time it did not," Fox said. "In hindsight, it does.
"If Thomas said it would do that, we believed him. Bottom line is I had total confidence in Thomas."
Fox said he told Etheredge that he wanted to leave his $50,000 in the park as an investment.
But in the end, it didn't matter which option he took. Wild West World was open only two months before closing and going bankrupt in July 2007.
Fox said he was approached by Etheredge about investing in December 2006. He said Etheredge told him "money was tight" in getting the park ready to open in May 2007.
Fox and his wife gave Etheredge $20,000 on Dec. 27, 2006. Then after withdrawing the money from the retirement annuity, they gave him $30,000 on Jan. 1, 2007.
Like other investors, Fox was questioned by both the prosecution and the defense about what he knew about Etheredge's past, Etheredge's financial situation at the time investments in the park were made and whether that knowledge would have affected investment decisions.
Testimony has shown that Etheredge owed more than $260,000 on his 2005 taxes, made multiple religious conversions, and had two felony convictions — one in 1979 in Texas on a bad check and the other a 1987 conviction in Kansas on nine securities fraud charges.
Fox said that he wasn't aware of those details.
"Would you have liked to have known more?" Biggs asked.
"I would have liked to have known," Fox said. "I would have done a lot more praying."
The defense, meanwhile, has asked investors whether they did enough to learn about Etheredge's background or paid attention to events in the news surrounding his past before investing.
Most investors had a hint about Etheredge's past from reading a chapter he wrote for a book, "Real Men, Real Faith." The chapter refers to Etheredge spending time in prison but gives few details.
Pat Bullock, associate pastor at Summit Church, had read the chapter before investing $10,000 in Wild West World in Dec. 17, 2006.
"Did you go out looking at any documents?" defense attorney Chris Joseph asked.
"No," replied Bullock.
Later, Biggs asked Bullock, "Would you know how to go about doing a criminal background check on someone?"
"No, sir," replied Bullock.
Also testifying Tuesday were Mike and Pamela Porter, who met Etheredge at Summit Church. They invested $100,000 in February 2007.
The money was invested after Mike Porter, a Valley Center accountant, was told by Etheredge that he needed $500,000 to complete the park and avoid mechanics liens being filed.
Porter testified that he didn't do a financial background check on Etheredge because he knew that banks had lent Etheredge money.
"From my experience as an accountant, the banks lending do their due diligence," he said.
The defense, which has delayed making an opening statement until the prosecution rests its case, did put a character witness, Jean Plummer, on the stand Tuesday because she won't be available later.
Plummer, who is involved with tourism in Butler County, said she has known Etheredge since the early 1990s. They worked together in tourism and in prison ministries in El Dorado.
She said he also did a live radio show with her in which he talked about being in prison.
"I've never known him not to be truthful with me," Plummer said. "I've never known him to be dishonest, either. He never tried to hide anything."