Sunday, October 20, 2002

Donahue asks ex-employees to bail him out

Seeks leniency letters for judge

By Amy Higgins
The Cincinnati Enquirer

Former financial planner Stephen G. Donahue, having pleaded guilty to fraud in July, is asking former employees and colleagues to help keep him out of jail.

But some who received his letters last month seeking support have a different response for the former head of S.G. Donahue & Co. and Donahue Securities.

"I was flabbergasted," said Mary Ladd, who worked for Mr. Donahue for 5 years. "I just find it amazing that he'd expect people to support him."

Mr. Donahue was accused in February 2001 of bilking some 123 brokerage clients out of $6 million by pocketing their money instead of depositing it into a bogus tax-free bond fund.

Mr. Donahue's lawyer, Glenn Whitaker, did not return phone messages about the letters. He previously said that Mr. Donahue always intended to repay everyone, regardless of how the judge rules.

Mr. Donahue pleaded guilty in July to a federal fraud charge. He's scheduled to be sentenced Jan. 15 in federal District Court.

He faces hefty fines and up to five years in prison - but he's asking supporters to ask Senior Judge Herman J. Weber to go easy on him.

Specifically, letters such as the one Ms. Ladd received ask supporters to detail their relationship with Mr. Donahue and make comments on his integrity over the years.

The letter asks supporters to use phrases such as "be as lenient as possible with regard to sentencing," "show mercy with regard to sentencing," and "please allow Steve to continue participating as an active and productive member of society."

Ms. Ladd said she indeed wrote a letter to Judge Weber - but didn't exactlyfollow Mr. Donahue's request.

Instead, she and others responded to Mr. Donahue's letter-writing campaign by contacting the prosecutor and federal probation officer asking for strict sentencing recommendations.

"So many people were hurt," said Tom Wingo, a financial planner formerly with S.G. Donahue. "It was our feeling the only voice being heard right now is his side."

Ms. Ladd said that Mr. Donahue's letter was so startling because it was sent to many of the employees whose lives his scheme ultimately uprooted.

"Not only were the clients deceived and taken advantage of, but a large number of hard-working people, employees, had been taken advantage of," she said. "I was shocked, saddened. It was very unfair they would ask any of us to do that."


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