Judge finds Wichita businessman linked to wife’s multi-million theft guilty of contempt
A prominent Wichita businessman tangled up in a multi-million dollar lawsuit spurred by his wife’s alleged embezzlement from two local physician-owned ventures was found guilty of contempt for failing to turn over an accurate record of his financial transactions.
In a March 6 written ruling, Sedgwick County District Court Judge David Dahl called Tom Martin’s omissions and delays in providing the information to the court and plaintiffs, Mid-Kansas Wound Specialists and Emergency Services, “troubling” and “disquieting.”
Referring to an instance where Martin sold off one of his companies — WE LLC — then claimed it had no cash on hand to turn over, Dahl wrote: “This is disturbing to the Court, and was not justifiable.”
“Defendants were not to receive any monies as a result of the sale. Defendants completely ignored the order. The cash on hand disappeared,” Dahl wrote.
Attorneys for Martin and his businesses did not immediately comment last week.
In August 2018, the court awarded Mid-Kansas Wound Specialists and Emergency Services a more than $11 million default judgment against Martin’s wife, Nancy Martin, after she stopped answering court filings and refused to show up for hearings.
But the case against Martin and his businesses is still playing out and to date there has been no judgment against them.
Tom Martin is accused in the 2017 lawsuit of aiding and abetting his wife as she stole millions “on a regular and systematic basis” from the two medical businesses that employed her for decades as their business administrator and trusted her to handle their financial books. Nancy Martin cut checks drawn on the medical businesses’ accounts to herself, her husband and their companies, as well as to retailers and her credit card companies, and paid herself more than she was due, the lawsuit alleges.
To conceal the thefts, she changed the date, check number and payee information in the businesses’ accounting software and had a ghost bank account. When confronted in May 2017, Nancy Martin told Mid-Kansas Wound Specialists and Emergency Services that she’s borrowed some money to support her family’s lavish lifestyle and businesses, but said she paid some of it back.
She has never responded to repeated interview requests from The Eagle.
An accounting firm the medical businesses hired found Martin had embezzled millions of dollars between 2012 and 2017. Mid-Kansas Wound Specialists discovered millions more missing when it checked its books back to 2006.
Mid-Kansas Wound Specialists provides wound care services at Wesley Medical Center in Wichita, and Emergency Services provides emergency medicine services. Their lawyer, Todd Shadid, declined to comment Thursday.
After the medical businesses sued in October 2017, the court issued a restraining order and injunction that not only bars the Martins and their businesses from disposing of assets except to pay for “reasonable and necessary” living, health care, legal and business operating expenses, but also demanded a “full, complete and detailed” accounting of their finances.
The couple was also expected to identify and explain any single or series of financial transactions totaling more than $25,000 that “encumbered, converted, materially altered, hid or disposed” of any of their assets, court documents say.
But Martin and his companies left pieces out of the financial paper trail in some cases and dragged their feet providing information in others, court documents allege.
In response, Mid-Kansas Wound Specialists and Emergency Services asked the judge to find them guilty of contempt — meaning they ignored court orders.
Dahl did so and ordered Martin and his companies to pay nearly $185,000 in funds they withheld from the court and plaintiffs, including nearly $55,000 for the missing cash-on-hand; $50,000 Martin transferred into a joint checking account that his wife later withdrew in full; and nearly $80,000 in other money paid to Martin and the couple’s businesses.
Dahl also slapped them with a $25,000 sanction and issued a warning: Follow court orders, or face more fines.
“The Defendants are required to respect and comply with the Court’s orders, which they have consistently fell short of. Future non-compliance will trigger additional consequences.”
If Martin and his businesses do not pay up by June 5, they will receive another $50,000 sanction, Dahl wrote in his ruling.
The penalty increases to $75,000 if the money isn’t paid by Sept. 5. If the balance is still outstanding by Dec. 5, Martin and his companies will receive a $100,000 sanction.
The Martins, well-known in the Wichita business and philanthropic communities, were worth close to $32 million in December 2016 — before Nancy’s allegedly embezzlement surfaced — but that dipped to $27 million by August 2017 as Mid-Kansas Wound Specialists and Emergency Services prepared to filed suit.
Nancy Martin had worked as business administrator for Emergency Services for 30 years by the time the company discovered her alleged embezzlement in May 2017, and for Mid-Kansas Wound Specialists for 20 years. She has also served on the Wichita State University Foundation board and the university’s National Advisory Council, the Wichita Art Museum board, and the University of Kansas Endowment 4-Wichita board, which fundraises for the KU School of Medicine-Wichita.
Tom Martin, a longtime businessman who owned and operated Napa-branded auto parts stores and Aaron’s Rent-to-Own stores in several states, has served on the Wichita Community Foundation board.
The couple divorced after the medical businesses filed suit — but their marital assets have not yet been divided, court records show. In February 2019, Tom Martin filed for Chapter 11 bankruptcy, but that case also remains pending.
This story was originally published March 16, 2020 at 5:01 AM.
