Ex-executive’s projects called legitimate, scams

Testimony differs in fraud sentencing

Thursday, July 10, 2014

FAYETTEVILLE — Testimony differed Wednesday on whether a former Rogers businessman tried to run legitimate businesses or whether he was just out to fleece investors in his company.

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A hearing began Wednesday in U.S. District Court on how long a sentence Allen Wichtendahl, 62, should receive after he pleaded guilty in October to charges of mail fraud, securities fraud and money laundering. The hearing before U.S. District Judge Timothy L. Brooks is scheduled to last three days.

Wichtendahl has been in jail since his arrest in early January 2013. He was escorted into court Wednesday with his hands cuffed behind his back and wearing an orange and beige striped jail uniform with rubber sandals and wire-rimmed glasses. He was gray-haired and very slim but seemed upbeat as he rocked in his courtroom chair and appeared to be engaged in the proceedings throughout the day.

Ex-wife Dessislave Sapoundjiera, who married Wichtendahl in Bulgaria, testified she thought Wichtendahl tried to make an Amway distribution business in Bulgaria work in the late 1990s and early 2000s, but he had a bad business plan that doomed it to fail.

At no point did she think he was there to commit fraud, she told Brooks.

Richard Merritt of Pensacola, Fla., said he and a dozen others invested around 1999 in the doomed Bulgarian Amway project and in a Dedicated Digital Technology Inc. project to develop a compression computer disk that would speed the transfer of data over the Internet. The disk project failed, he said.

Quint Higdon of Pensacola, who managed the collection of investor payments for Wichtendahl’s New Vision Technology, testified he never saw evidence that any of the enterprises Wichtendahl told investors he was working on would ever make enough money to get off the ground.

Among them were multimillion-dollar power-production and cassava-processing projects in Nigeria and a used tractor importation business in Bulgaria. Cassava is a tuber used mostly for food.

In fact, Higdon said, of the $200,000 to $400,000 he collected for New Vision Technology, Wichtendahl had him make only one dividend payment of $23.05 to investors in the tractor division for the purported sale of one tractor.

In questioning by Brooks, Higdon said the money for the dividend payment was drawn from the bank account where the investor payments were deposited.

The government is asking Brooks to sentence Wichtendahl to up to nearly 34 years in prison for bilking 331 investors and to repay them more than $1 million as restitution.

The government alleges that instead of putting investor money into the company’s enterprises, Wichtendahl spent most of the money on such things as rent on two houses, expensive vehicles, his wedding to his then-wife Diana Stewart, clothing, jewelry, dental work and child support.

Testimony resumes today.