Charges dropped against ex-CFS executive

Saturday, December 6th 2003, 12:00 am
By: News On 6

Criminal charges against a former executive of Commercial Financial Services Inc. have been dropped following the acquittal of the defunct debt-collection company's founder.

U.S. Attorney David O'Meilia filed a motion on Friday to dismiss the charges against former CFS Development Director J. Bruce Hadden.

Prosecutors requested the action following Bill Bartmann's acquittal on Wednesday on charges related to the company's collapse, said Randy Edgmon, a spokesman for the U.S. Attorney's Office.

CFS, co-founded by Bartmann, pioneered the practice of bundling bad debt and selling bonds based on that debt.

The company, which employed about 3,900 people in Tulsa and Oklahoma City at its height, ran into financial problems in 1998 when anonymous allegations of inflated collection rates and sales of bad accounts to a firm controlled by a CFS executive emerged.

The company filed for bankruptcy and ceased operations in 1999.

In the aftermath, a federal grand jury returned a 58-count indictment against Bartmann in 2002.

The indictment alleged conspiracy and fraud related to the failure of CFS. Bartmann was accused of making $129.6 million from investors through falsely inflating the company's performance.

Investors lost more than $1.6 billion.

Hadden and former CFS Director of Investor Relations Gertrude A. Brady were added to the Bartmann indictment as co-defendants in July.

U.S. District Judge Sven Erik Holmes severed the two from Bartmann's case on Aug. 4.

Holmes dismissed all of the charges against Brady in September after finding that prosecutors had entered into a binding agreement in March 2002 not to prosecute Brady in exchange for her cooperation.

Bartmann was found innocent of all charges following a 43-day trial.