Obstruction case against Lexington executive goes to federal jury for deliberations
When Wayne Wellman walked into Kathye Hollopeter’s office at CRM Companies in March 2018 and asked her to write a check for $1,000 for a Lexington council race, Hollopeter didn’t hesitate.
She wrote the check. A week later when Wellman asked her to write another $1,000 check to a different Lexington council race, she wrote a second check.
Why?
“He was my boss,” Hollopeter told a federal jury in Frankfort last week.
Hollopeter also admitted she initially lied to FBI agents when questioned about the two checks. She told them Wellman had loaned her the money to make the contributions but she was going to pay him back. She also admitted that a ledger that showed Hollopeter had repaid him for the loan was provided by Wellman and was fake. Hollopeter, who has worked for 20 years for Wellman, told the jury she lied about the contributions “because I didn’t want to see Wayne get in trouble.”
Hollopeter was one of several current and former employees of Wellman to testify last week and this week in the federal trial against the former executive of CRM Companies.
After five days of testimony, the jury began deliberations early Monday evening.
Wellman faces multiple counts of lying to federal investigators and convincing others to lie about campaign contributions to Lexington council candidates during the May 2018 primary. Wellman told co-workers to lie to FBI agents and a federal grand jury, and created false documents to cover up where money for those campaign contributions came from, federal prosecutors have said.
In court documents, federal prosecutors allege Wellman circumvented state campaign finance limits that prohibit individuals from donating more than $2,000 to a candidate by giving money to more than a dozen straw contributors and then reimbursing them.
Some of those employees were truthful in their testimony during the five-day trial, said Assistant U.S. Attorney Ken Taylor during losing arguments Monday. Others tried to walk back previous statements that they told a federal grand jury in April and tried to stick with stories that checks from Wellman were not repayment for contributions they made to one or two Lexington council candidates.
Those council candidates are former Lexington-Fayette Urban County Councilman Kevin Stinnett, who was running for mayor in 2018, and Vice Mayor Steve Kay. No allegations of wrongdoing have been alleged against Stinnett or Kay.
Jeff Collins, another CRM employee, originally told the FBI agents that he had received checks from Wellman but it was not repayment for contributions he made to council candidates. They were for work he did to lease property Wellman owned in Elizabethtown, Ky. Taylor said Collins then later called the FBI and changed his story and admitted that it was repayment for his campaign contributions.
But in court, Collins stuck to his original story -- the check from Wellman was for help leasing property.
Collins refused to meet with prosecutors prior to the trial, Taylor said. But he did meet with Wellman’s lawyers.
Hollopeter and others were telling the jury the truth, Taylor said.
“They had every reason to lie to protect Wellman but they did not,” Taylor said.
Kent Wicker, Wellman’s lawyer, painted a different picture for jurors during closing arguments Monday. He said Wellman often loans money to people without asking to be repaid and contends a disgruntled businesses competitor hired a law firm to investigate him and spread unfounded rumors.
Wicker said Hollopeter and other employees who testified that they made contributions at Wellman’s direction and were told to lie about it were harassed and intimidated by FBI agents to change their statements. Those agents intimidated witnesses until they told them what the FBI wanted to hear, Wicker said.
Wicker said that it was Collins and others that were telling the truth.
CRM Companies, where Wellman was an executive, was one of four bidders on a new city government center for the city of Lexington. CRM Companies’ proposal — to renovate and expand the Lexington Herald-Leader building on Midland Avenue —was picked as the winning bid. The council ultimately voted not to move forward on a new city government center in September 2018.
Wicker told the jury during opening arguments that it was a losing bidder, Cowgill Properties, that hired a law firm to investigate CRM Companies after it lost the bid for the city government project. It was investigators with the McBrayer law firm who turned information over to the FBI about the alleged straw contributors, Wicker said last week.
Representatives from Cowgill and McBrayer did not return calls asking for comment.
Wellman faces 11 different counts related to obstructing a federal investigation or inducing others to obstruct a federal investigation and creating bogus documents -- such as Hollopeter’s repayment ledger -- to obstruct the federal investigation.
In addition to the federal case against him, Wellman also has been indicted on 16 state campaign violations for using straw contributors to circumvent state campaign finance laws.
