Fourteen months after bankers first discovered a check kiting scheme involving $3 million of worthless checks, Joe Waldholtz was indicted Thursday on 29 counts of bank fraud.
Rep. Enid Greene, R-Utah, said Friday that such action likely didn't come much sooner because her estranged husband, Joe, was such an artful liar that bankers continued to deal with him for months despite their discovery.So, she adds, it shouldn't be surprising that Waldholtz could also manage to keep her in the dark about such fraud - even though a joint account had been frozen because of it. Still, one of Waldholtz's relatives now asserts that she is as guilty as he is.
Meanwhile, officials at First Security Bank in Utah and the Wright Patman Congressional Credit Union remained mum about why they apparently continued to deal with the Waldholtzes even after they discovered the check kiting.
The charges Thursday - for which Waldholtz faces 30 years in prison and up to a $1 million fine if convicted - may be only the first batch that he, and possibly his wife, could face.
Eric Holder, U.S. attorney for the District of Columbia, issued a statement Thursday that "today's indictment is a product of a broader investigation of financial matters related to Joseph and Enid Waldholtz. The investigation of matters not contained in today's indictment is continuing."
Holder said Greene is "not alleged to have participated in the scheme alleged in today's indictment" but did not say whether she may eventually face charges stemming from a grand jury's continued probe into possible campaign violations, filing of false statements and embezzlement.
Greene, however, was quick to say in a Deseret News interview, "I am not guilty of any wrongdoing, and I am confident that the grand jury will find that." She added, "I and my family are at the end of a long line of people that Joe Waldholtz victimized."
The grand jury indictment says that in February 1995 - a month after Greene took office - Waldholtz began a check kiting scheme with accounts at First Security and the congressional credit union.
It alleges he wrote checks from one to the other at the same time, resulting in bogus deposits in each of up to $200,000 a day.
"By writing checks back and forth between the two accounts, and consistently making a new deposit at one institution before the previous deposit at the other institution had failed to clear, Wald-holtz made it appear that there were substantial assets in both accounts when, in fact, the balances were negligible or negative," Holder said.
At the height of the scheme, Holder said accounts at the two institutions appeared to have more than $752,000, when in fact they had a combined negative balance of more than $197,000 - a difference of more than $950,000.
Meanwhile, the indictment charges that Waldholtz was writing other checks from those accounts. It says he wrote worthless checks totaling $1,455,000 from the credit union account and $1,515,000 from the First Security account - for a total of just under $3 million.
Holder said First Security paid out $141,000 on such checks, and the credit union paid more than $66,000 before the credit union discovered the scheme on March 2, 1995, froze the Waldholtzes' account and contacted First Security.
He said they also found the First Security account was overdrawn by more than $200,000 - but that First Security ultimately suffered no financial loss because Greene's father, Forrest, loaned Waldholtz money that he used to cover it. Enid said Friday her father did not know beforehand that part of the loans he provided would go for such purposes.
Holder's statement did not say whether the credit union lost money, and it did not respond to Deseret News inquiries. Greene, however, said it was her understanding that the credit union had not lost any money from the problems.
Greene said First Security (for whom she had done legal work as a private attorney) continued to deal with them for months despite the problems - and she's not sure what Waldholtz told it because he handled all dealings on the matter.
But she said Waldholtz told her that problems on the accounts resulted from "problems with his family" - who he told her was freezing assets over disputes on extended family wealth and trusts.
She also said previously that Waldholtz blamed bad checks written on the accounts on thieves who had stolen a checkbook and other misunderstandings.
She said when Waldholtz's primary account was frozen at the credit union, he opened an account at another Washington bank "because it would be more used to dealing with the large amounts involved." Greene also had another account at the credit union.
Credit union officials said Friday that only its president, Robert A. Hess, could comment on how it handled the matters - and that he was out of town and unavailable. First Security also had no comment.
Meanwhile, Waldholtz's cousin in Pittsburgh wonders why Greene wasn't named in the indictment.
"My first thoughts are, `Where's Enid?' I can tell you that this girl is as guilty as he is, if there is any guilt to pass around," said Steve Slesinger.
He also wants to know whether any of his grandmother's estate funded the congresswoman's campaigns.
"I need to know that. All of my family needs to know that," he said.
Slesinger, along with Waldholtz's father, Harvey, were named co-guardians of the grandmother's estate about two years ago. Ever since, they've tried to track down at least $600,000 entrusted to Joe Waldholtzby her beginning in 1986.
An Allegheny County judge ordered Joe Waldholtz to turn over the money or make an accounting on Nov. 2, 1995. He repeatedly failed to comply with the order, so the judge threw him in jail in March.
A defense attorney was working Friday to free him, and Holder said he expects Waldholtz to be arraigned in Washington on the bank fraud charges within 10 days.
Waldholtz originally told the Pittsburgh court that all of his grandmother's cash was safe in three separate bank accounts. Five days later, he admitted through his attorney that he didn't have any of the money.
Slesinger said he's always suspected some of his grandma's estate might have been funneled into Greene's campaigns. Now, he is more convinced.
"Three million dollars? That's a lot of cash and things get tangled up," he said.
Harvey Waldholtz, contacted late Thursday, said he couldn't talk about the indictment or his efforts to find his mother's cash.
"I've been told not to talk about it, and that's all there is to it," he said. A Pittsburgh newspaper reported Friday that Joe had called his father after news of the indictment broke and told him not to talk to reporters.
Greene, who last month quit using the surname of Waldholtz, is in the process of divorcing Waldholtz and is seeking sole custody of their baby daughter, Elizabeth. She announced in March she is not seeking re-election.