Judge Says Statek Exec Diverted $28.5 Million

Frederick Johnston, a U.S. executive imprisoned for hiring Irish hit men to kill associates who ousted him from control of Orange-based Statek Corp., looted the electronics maker of $28.5 million to pay for his lavish lifestyle, a judge ruled. Delaware Chancery Court Judge Jack B. Jacobs concluded that Johnston and fellow executive Sandra Spillane diverted Statek funds to cover their personal travel expenses, art purchases, furniture and dry-cleaning bills and then tried to hide the diversions through sloppy record keeping. Johnston, former chairman of the holding company that owns Statek, is serving six years in a British prison. He was convicted in 1999 of paying Irish criminals to kill former business partner Miklos Vendel and others involved in lawsuits over control of Statek and the company’s missing millions. The murders were never carried out. “Johnston and Spillane systematically looted [Statek], treating [its] assets as their private preserve,” Jacobs said in a 161-page decision ordering the return of the missing funds. Allan Pepper, a New York attorney representing Johnston in the Delaware case, said his client believed he had accounted for all the money. “We are considering our options,” Pepper said, when asked about an appeal.