Former KU basketball player pleads guilty to defrauding bank
By CHRISTIE APPLEHANZ
A former University of Kansas basketball star and a longtime Topeka businessman pleaded guilty in U.S. District Court recently to defrauding a local bank to obtain money for his business and to pay for medical treatment for his wife.
The court fined Delvy Lewis, former owner of Delvy Lewis Inc., a Topeka copier and office supply store, almost $1.5 million Oct. 26 for falsifying purchase orders to obtain loans from Commerce Bank and Trust. Starting next week, he also must serve five months of home detention, paying the $4.60 daily cost of electronic monitoring and a $100 specialassessment.
Lewis pleaded guilty to "false documentation submissions to a federally insured institution," according to court documents. The charge stemmed from violations beginning in 1994. Lewis misled bank officials with falsified paperwork, resulting in loans to his business for more than $2.25 million, according to court documents.
Lewis had a line of credit with Commerce for his business to satisfy equipment orders and lease agreements. Equipment purchased was used as collateral. Lewis inflated purchase orders to get more funds than was justified, court documents said.
Lewis played basketball at the University of Kansas from 1964 to 1966 and served as team captain his senior year. He was named to the All-Big Eight team in 1966.
"It's just a very tragic situation," Lewis said Monday. "I made a bad mistake. I'm going to pay for it. I want my mistake to help others not make the same mistake."
In a motion asking for sentencing below guidelines, called downward departure, Lewis' Overland Park-based attorneys argued the actions were a "dramatic departure from his personal standards" prompted by "financial and emotional strains created by his wife, Karen's, diagnosis with breast cancer."
Delvy Lewis' insurance company initially had refused to cover Karen Lewis' double mastectomy surgery and related medical expenses. Lewis used the funds from Commerce to pay more than $100,000 medical expenses, court documents said.
At the same time, sales at his business weren't as profitable or as numerous as projected. Lewis continued to inflate purchase orders to borrow from Commerce to purchase new equipment, pay off outstanding advances and pay his roughly 15 employees' salaries, court documents said.
In 1997, Lewis "realized he could no longer maintain the dishonest practice he employed to save his business," according to court documents.
"He presented himself to officials and voluntarily told them everything that was going on," said Lewis' attorney Jeffrey Morris. "The appropriate sentence under the guidelines would have been 37 months to 46 months. The special circumstances that we presented to court got him the sentence that he got."
Karen Lewis suffers from Parkinson's disease. In a letter submitted to the court, Dr. William Koller, professor and chairman of the neurology department at the University of Kansas Medical Center, said separating Karen Lewis from her husband could worsen her physical condition and lead to her institutionalization.
John Fernstrom, Commerce senior vice president, said substantial recovery of the money has been made through the sale of DLI and insurance.
"Delvy Lewis' conduct was unfortunate -- for both his family and the community," he said.
Copyright 1998 The Topeka Capital-Journal