TOPEKA, Kan.-
A federal judge on Monday sentenced former Westar Energy Inc. Chief Executive David Wittig to 24 months in prison for bank fraud, cutting his sentence by more than half.
But U.S. District Judge Julie Robinson still surpassed the six-month prison term recommended by an appellate court, saying it “failed to reflect the seriousness of the offense.”
Robinson sentenced Wittig to 60 months in prison in April, but the 10th U.S. Circuit of Appeals in Denver overturned that sentence in November as being too harsh.
Robinson also sentenced Wittig on Monday to three months of supervised release and ordered him to pay a $1 million fine. With time off for good behavior, Wittig, who has been in prison since January 2006, could be released as early as October.
Attorneys for Wittig said they will appeal the new sentence. They also asked Robinson to release Wittig from prison during the appeal.
The judge said she might rule on that later this week.
Wittig was convicted in July 2003 of loaning $1.5 million to Clinton Odell Weidner II, a former bank president, then helping him hide the transaction from bank and federal officials.
The appeals court threw out previous prison sentences of 51 and 60 months for Wittig, saying calculations in determining the sentences were flawed and the sentences were far longer than guidelines allow.
The three-judge panel in November said the maximum penalty Wittig could receive under federal sentencing guidelines is six months in prison. The guidelines are not mandatory, but judges are required to justify departing from them.
Prosecutors say Weidner, then president of Capital City Bank in Topeka, extended Wittig’s line of credit at the bank in 2001 by $1.5 million, and Wittig loaned the money back to Weidner with interest so he could invest in an Arizona real estate deal.
They claim Wittig loaned the money to Weidner in exchange for his future help providing loans to Wittig and other Westar officials wanting to invest in the proposed spin-off of the company’s unregulated businesses—a deal that could have garnered an estimated $30 million to $60 million for Wittig.
Kansas regulators eventually nixed the deal.
Much of the discussion Monday centered on whether Robinson, in calculating a new sentence, could consider the amount of money Wittig actually received in the scheme and whether he intended to cause the bank to lose money.
The appeals court decision in November said she couldn’t consider those issues, while a decision in 2004 appeared to say she could.
In her decision, Robinson said sentencing Wittig to just six months would treat his crime like a “misdemeanor” and encourage future criminals to structure their fraudulent transactions like his to avoid serious penalties. She also justified going beyond the sentencing guidelines because the six-month term didn’t recognize that Wittig was an active participant in the crime and benefited from it.
She said she also felt six months was too short compared with Weidner’s five-year sentence.
After the hearing, defense attorney Steven Reiss noted that judges weren’t allowed to go beyond sentencing guidelines in 2004 when Wittig originally was sentenced.
“The very sad irony is if he had been given the correct sentence in the beginning, when the sentencing guidelines were mandatory, he would not be in prison today,” he said.
