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 user 2013-06-22 at 8:59:49 am Views: 129
  • #2019
    Two Ex-Katun executives acquitted

    Two former Katun Corp. Executives were acquitted Wednesday on federal charges that they conspired to defraud airlines through a ticketing scheme.

    Kerry Baubie of Apple Valley, Katun's ex-chief financial officer, and Raymond Wirtz of Palm Harbor, Fla., who was a senior vice president, were indicted in April on a charge of conspiracy to commit fraud. They had faced a maximum penalty of five years in prison and a $250,000 fine for the scheme, which allegedly cost airlines more than $500,000. ,p>"There was a lot of evidence that the scheme was conceived by [former CEO Terence] Clarke and that Clarke is a manipulator," said Baubie's lawyer, Jon Hopeman.

    Peter Wold, who defended Wirtz, said his client had been a vocal critic of the policies, which ultimately were enforced by Clarke.

    Baubie and Wirtz still face unrelated commercial bribery charges that will be heard later this month.

    Assistant U.S. Attorney Hank Shea said that prosecutors respected the jury's verdict.

    Katun co-founder David Jorgensen earlier pleaded guilty to similar airline-related fraud charges, as did the firm's former general counsel, James Moen, and former senior executive Glenn Spitzer.

    The Bloomington copier parts company itself had admitted guilt for the scheme as part of an $11 million settlement in January with the federal government. Last year, former Katun CEO Clarke received a two-year prison sentence and $6 million in penalties for tax evasion related to his activities at the company.

    The fraudulent practices began sometime before June 1988 when the Katun travel department obtained stickers used by travel agents to authorize ticket changes. Various Katun employees used the stickers to make unauthorized changes and avoid certain requirements, such as Saturday stays, to obtain discounted airfares.

    Northwest Airlines negotiated its own $155,000 settlement with Katun in April 1991.

    In early 1991, the indictment said, Katun began a new scheme in which reduced-fare, extended-stay tickets were purchased, but employees didn't travel on the dates booked. Prosecutors said Katun avoided restrictions by making new reservations that essentially manipulated airlines' reservation and ticketing systems.

    * Post was edited: 2004-08-27 10:16:00