Missouri Judge Considering Whether City Committed Fraud

A federal judge in Kansas City is considering a fraud probe of Lee’s Summit and its attorneys after the city refused to pay $16 million to a former resident who spent several years behind bars for a crime he did not commit.

The case involves Ted White, who was sentenced to 50 years in prison after being convicted of molesting his stepdaughter. A federal court later determined White’s estranged wife and the detective investigating the case were having an affair and had conspired to get White convicted on false charges.

A federal appeals court last year upheld a $16 million judgment against former detective Richard McKinley and White’s ex-wife, now Tina McKinley.

Lee’s Summit says it doesn’t have to pay, despite a 2006 contract it signed with White promising to cover any award against McKinley in a federal civil lawsuit. In return for the city signing the deal, White dropped Lee’s Summit and its police chief from the suit.

Now the city claims a local ordinance forbids it from indemnifying a city employee who violates someone’s constitutional rights.

U.S. District Judge Nanette Laughrey plans to conduct a closed hearing with Lee’s Summit officials and attorneys to decide whether the case merits a crime-fraud exemption to attorney-client privilege. Such a ruling would allow her to review documents that could show whether the city entered into the agreement with White in bad faith.

The city argues that documents and conversations related to the decision to sign the agreement are privileged and should not be allowed to be considered in court. But White’s attorneys counter that those documents and testimony from witnesses will prove the city never intended to honor the deal.

“It comes down to this: did they enter into the agreement in good faith or bad faith?” White said. “If they entered into it in good faith, pay the bill. If it was in bad faith, it’s fraud.”

Kansas City attorney Brian McCallister, one of several attorneys representing White, said Lee’s Summit owes an additional $27,000 per month in interest for every month it fails to pay the judgment. Legal bills through the last appeal were $1.4 million, and McCallister thinks that could rise by an additional $2 million, depending on how long it takes for the city to comply.

That’s on top of hundreds of thousands of dollars the city has paid a Kansas City law firm to represent it in the case, McCallister said.

He said Lee’s Summit taxpayers are hurt most by the city’s foot-dragging, but added that White didn’t ask to spend five years behind bars in a maximum security prison where he was labeled a child molester.

McCallister said Lee’s Summit can afford to pay the judgment.

“This municipality is flush with money,” he said. “It has a $55 million a year budget and has managed to rat-hole 80 million bucks.”

If Laughrey deems the city’s agreement with White valid, or decides the city’s actions related to the contract were in bad faith, the next step could be garnishment proceedings against Lee’s Summit, McCallister said.

White was convicted in 1999 of sexually abusing his 12-year-old stepdaughter after his then-wife accused him of the crime while the two were separated in 1998. After his conviction but before sentencing, White fled to Costa Rica, where he stayed for several months before being captured and brought back to Missouri. He was sentenced to 50 years behind bars.

While he was in prison, his attorneys discovered that White’s wife was having an affair with McKinley while he was investigating the case. McKinley, who no longer works for the police department, failed to disclose the relationship to the court and also didn’t take into evidence the stepdaughter’s diary, even though it might have helped White’s defense.

White won a new trial that ended in a hung jury in 2004, then was exonerated in 2005 after a third trial.

A federal jury in 2008 awarded White $16 million _ $14 million in assessed damages and $1 million each from Richard and Tina McKinley in punitive damages.

Tina McKinley’s homeowners insurance policy paid $600,000 toward her share, money that White said went mainly toward attorney fees. He also received roughly $363,000 in January from one of the city’s insurance carriers.

Joe Rebein, an attorney representing the city, didn’t return multiple calls from the AP seeking comment. Messages left with a Lee’s Summit spokeswoman, who has declined to comment several times in the past, also weren’t returned.