In the News

Etheredge case must go to trial, judge rules

BY RON SYLVESTER
The Wichita Eagle
Thu, Jul. 23, 2009

When Thomas Etheredge needed money, he went to church, according to testimony Wednesday in a Wichita courtroom.

Pastor Terry Fox and members of his congregation said in a preliminary hearing that they were willing to write checks ranging from $50,000 to $100,000 for

Etheredge's Wild West World theme park, which failed soon after it opened. Etheredge had given his life to God, and Fox said that carried a lot of weight.

After hearing from witnesses, including Fox, Sedgwick County District Judge Ben Burgess ordered Etheredge to stand trial on nine counts of securities fraud.

Prosecutors say Etheredge lied about his business and financial experience to net cash for his project.

Defense lawyer Steve Joseph portrayed Wild West World as simply a business that failed and lost money for investors who didn't do their research. Joseph entered a plea of not guilty on Etheredge's behalf.

Etheredge has been in the Sedgwick County Jail since May 1 in lieu of $1 million bond.

A fresh start

As the hearing entered its third day, Etheredge listened to Fox, his former pastor, testify about why he trusted Etheredge with his retirement fund.

Fox, who set up his nondenominational Summit Church next to the theme park, testified that he follows the Southern Baptist tradition. Southern Baptists, he said, believe that those who are "born again," or convert to Christianity, deserve a fresh start.

Fox said Etheredge had said in church that he'd spent some time in prison. Fox didn't ask for the details.

Fox testified that he didn't know that Etheredge's conviction in Kansas came for securities fraud, that he'd been accused of running a Ponzi scheme, or that he'd also been convicted of a similar crime in Missouri.

"I was blinded very much by the conversion point," Fox said.

Fox located his church in Wild West World's Johnny Western Theatre before the park opened in May 2007. The church held its weekly services, vacation bible school and youth programs there.

Fox had an office next to Etheredge's on the park grounds.

Fox and his wife, Barbara, dipped into their retirement fund, paying substantial penalties for early withdrawal, to write Etheredge a check for $50,000.

Etheredge, Fox explained, said that Wild West World would double the pastor's money in the first year. Or, if Fox chose, he could become a long-term investor in the amusement park and share in its profits.

"Many times we prayed for the success of the park," Fox said. "We believe in prayer. Still do."

Wild West World went bankrupt two months after it opened in May 2007.

Too good to be true

The double-your-money claim seemed too good to be true for Michael Porter, an accountant.

"I told him I thought that was excessive," Porter testified. "I wasn't interested in that."

Porter, who also knew Etheredge through Fox's church, testified that Etheredge told him he needed to raise $500,000 to stave off contractors from putting mechanical liens on the park.

If Etheredge could just get the park open, it would ease his cash flow problems, Porter remembered him saying. Porter said Etheredge claimed to have all but $100,000 to pay the contractors.

"But he said he'd rather deal with people he knew and went to church with," Porter said.

Porter agreed in February 2007 to loan Etheredge $100,000 at 12 percent interest.

Frankie Shellhammer Jones testified she served on the Summit Church board when she wrote Etheredge a check for $50,000.

Jones said Etheredge portrayed his criminal past as being "wrongly accused."

"He said he'd been exonerated," she testified.

David Brown, a retired doctor, had taken a course in securities when Etheredge came calling for money in March 2007. Brown said he met Etheredge through a friend of his, who attended Fox's church. Brown gave Etheredge $75,000.

It wasn't Brown's first deal. He said he'd invested in hospitals and oil fields and is a day trader on the stock market.

"Would you call yourself a pretty sophisticated investor?" Joseph, the defense lawyer, asked.

"Yes," Brown said.

But none of the witnesses who testified Wednesday said they knew the details about Etheredge's criminal history.

They didn't know that he'd not paid his income taxes in 2005.

They didn't know he'd missed a payment on his previous business, the Prairie Rose Chuckwagon, in 2006.

All of them said had they known, they would have thought twice about giving Etheredge money.

"I feel duped," Brown testified.