Prosecution rests case in Thomas Etheredge fraud trial
11/05/2010 10:22 PM
08/08/2014 9:55 AM
After nearly six days of testimony in the securities fraud trial of Wild West World founder Thomas Etheredge, the state rested its case Wednesday after calling 21 witnesses.
One of the final statements offered by a prosecution witness came from David Brown, who invested $75,000 in the failed theme park.
"One of the main reasons I went into it," Brown said, "was that he (Etheredge) said he never welshed on a debt, that he always paid his debts."
Defense attorney Steve Joseph told Sedgwick County District Judge Ben Burgess that he would begin presenting his case, including an opening statement, Monday morning. The trial is in recess today and Friday because Burgess had a prior commitment for those days.
Joseph told Burgess the jury could begin deliberating by the end of next week.
Brown, a retired Wichita physician, gave Etheredge the $75,000 on March 13, 2007 — two months before the park opened and four months before it shut down and went bankrupt.
Etheredge signed a six-month promissory note for the money at 50 percent interest.
Brown is the only investor listed on the nine counts of securities fraud who isn't a family member of Etheredge or who didn't know the theme park's founder directly through Summit Church.
Brown said he was told that Etheredge needed money for the park by a friend, A.J. Morris, who attended Summit at the time Brown invested.
Morris invested $100,000 in the form of a loan to Wild West World and at one time was listed as a 10th count in the securities fraud charges. But Morris protested to Burgess and was dropped from the complaint.
Morris was also at a meeting on March 13, 2007, when Brown met with Etheredge.
" (Etheredge) told me he needed money to meet payroll," Brown said. "I understood from him that he was going to get a $1 million loan from a bank on April 1."
Asked by Joseph whether needing a bridge loan to make payroll raised any concerns, Brown said, "It should have."
After the meeting, Brown went to Etheredge's office at Wild West World in Park City and discussions continued.
Etheredge told him about his previous business ventures, including in the oil industry, and that he had served on an advisory committee for President Reagan, Brown said.
"Everything was very braggadocios," Brown said. "Nothing negative."
He said Etheredge didn't mention such past experiences as serving three years in prison after being convicted of nine counts of securities fraud in 1987.
Brown said Etheredge did show him projections that the park would do well.
He said he was led to invest in the park because he and his wife thought it was a worthwhile cause and Etheredge had successfully operated the Prairie Rose Chuckwagon Supper.
Another factor influencing his decision was Etheredge's association with Gene Williams, a longtime Wichita pastor. Etheredge wrote a chapter for a book, "Real Men, Real Faith," which was compiled and published in 2004 by Williams.
"I think the world of Gene Williams," Brown said. He said he hasn't read the book.
In cross-examination by Joseph, Brown said he had previous investment experience.
"Obviously, I didn't do due diligence on this investment," Brown said.
Much of the state's case against Etheredge focuses on what he omitted telling investors.
Frankie Jones testified about the $50,000 she invested in the park in January 2007. She and Etheredge attended Immanuel Baptist Church, but she said she didn't get to know him until after the church split in August 2006 and they became part of the new Summit Church.
Jones said Etheredge told her in December 2006 that "he was tapped out, out of personal resources" and was short about $2 million for completing the park.
She said Etheredge told her he would double her money by the end of the park season in September.
"My thought at the time was that's a little aggressive for the first year of operation," Jones said, "but I never thought I would lose my money."