In the News

Boushka gets nearly 6 years for bank fraud

By Deb Gruver
The Wichita Eagle
Wed, Apr. 14, 2004

Dick Boushka has led a blessed life.

The Wichita businessman and former Olympic athlete said so Tuesday as a federal judge sentenced him to 70 months in prison for white-collar crimes involving millions of dollars tied up in financial schemes that became his undoing.

A man people looked up to as a role model and successful developer, Boushka learned his fate from U.S. Senior Judge Wesley Brown.

When Brown called the 69-year-old to the podium, Boushka apologized for his business dealings.

"I've let down my friends, terribly," Boushka said, adding that he put his family through anguish.

He said pleading guilty in 2002 was the "most difficult and traumatic decision" he ever made.

Brown sentenced Boushka to 70 months each, with no parole, on two counts of bank fraud and one count of making a false statement to obtain a loan and to 60 months for one count of omission of material information in the sale of a security. The prison time is to be followed by five years of supervised release.

Boushka will serve the sentences concurrently, meaning the maximum he will spend in prison is 70 months.

On Monday, Boushka's lawyer, Steve Joseph, and Assistant U.S. Attorney Debra Barnett wrangled over the extent of the bank's losses. The deeper the losses, the longer the sentence.

In what turned into an accounting debate, Barnett argued that Boushka had caused more than $24 million in losses to the bank and its investors. But Joseph was able to persuade Brown that the bank's losses were actually about $4.2 million.

Joseph said later that the distinction shaved two years off Boushka's sentence.

Justus Fugate, an investor and member of the board of the directors of American Bank, helped manage the bank from December 1998 until its sale to Hillcrest in October 1999.

Fugate on Monday told Brown that he was unaware of the problems at the bank until December 1998.

"We were summoned to Topeka on Dec. 23 of 1998 before the state banking board, where they presented us with a mind-boggling list of violations we were guilty of," Fugate said. "We did what we could to manage the bank until we sold it."

At the center of Boushka's problems were loans for which he had no real collateral.

Randy Wolverton, an FBI agent and lead investigator in the case, said "phony would be the best way to describe the collateral."

Wolverton said he spent time tracking down all the pledged bonds, notes, stock and property listed as collateral for the loans.

So did the bank.

"We were chasing collateral all over the world, in extremely complicated arrangements of property and stock," Fugate said. "The net of it was that we could never find any of the collateral."

He said that the bank's stock as of Dec. 23 was $100 a share. After adjusting for the losses in May 1999, it was $56 a share.

"It was devastating to the employees who thought their reputations were smeared. It was devastating to the stockholders who discovered their stock was worth far less than they thought it was. It was devastating to the managers who didn't want to be associated with that kind of thing," he said.

Brown also ordered Boushka to pay restitution of $4.6 million, including $3.3 million to shareholders of the bank.

A small portion of the restitution, $150,000, is to go to a Nebraska couple who accused Boushka of encouraging them to get involved in a financial opportunity in which they lost money.

Barnett said she did not yet know if Boushka would face charges for those claims.

That transaction occurred while Boushka was out on bond, which Brown said showed Boushka had not accepted responsibility for his actions.

Brown is allowing Boushka to voluntarily surrender.

He will begin his sentence as soon as the U.S. Marshal's office orders him to report, Joseph said.

© Copyright 2004 The Wichita Eagle