Franklin Scandal Timeline: 1988 to 1999

What the Franklin Timeline Covers

The Franklin scandal began as a financial crime and became a disputed child abuse case. It runs from November 4, 1988, when federal regulators seized the Franklin Community Federal Credit Union in Omaha and found tens of millions of dollars missing, to February 1999, when a federal judge entered a $1 million default judgment in a civil suit brought by one of the accusers. Between those two dates sit a legislative investigation, the death of its chief investigator, and two grand juries that rejected the abuse allegations as a hoax.

This timeline separates what was proven from what was alleged. The embezzlement at the credit union was proven and produced a guilty plea. The child abuse allegations were investigated, rejected by two grand juries, and never sustained in a criminal court. Both threads are dated below.

1988: The Credit Union Seized

November 4, 1988. The National Credit Union Administration raided and closed the Franklin Community Federal Credit Union. Auditors found roughly $34 to $40 million missing. The credit union’s manager, Lawrence “Larry” King, had run the institution for years as a prominent figure in Omaha and in national Republican circles.

Late 1988. The Nebraska Legislature moved to investigate the failure. The body that became known as the Franklin Committee, chaired by state senator Loran Schmit, was formed to examine where the money had gone and how the collapse had escaped regulators.

1989: Allegations Emerge

During 1989, the legislative inquiry into the financial collapse drew in a second set of claims. Witnesses, several of them former foster children and young adults connected to King’s circle, alleged that King had been involved in child abuse and a child prostitution operation. The allegations widened the committee’s work from a financial audit into an abuse investigation. The committee retained Gary Caradori, a former state trooper working as a private investigator, as its chief investigator.

1990: The Investigation Collapses

Early to mid-1990. Caradori took videotaped statements from several accusers, including Alisha Owen, Paul Bonacci, Troy Boner, and Danny King. The statements described abuse by named Omaha figures. They became the core of the abuse allegations and, later, the core of the perjury cases.

July 11, 1990. Caradori and his eight-year-old son died when his plane broke apart in flight while he was returning to Nebraska. State senator Loran Schmit and members of Caradori’s family suspected foul play. Investigators established no evidence of sabotage, and no definitive cause for the crash was determined. The death removed the investigation’s most active figure at the moment its allegations were under the most scrutiny.

July 1990. A Douglas County grand jury concluded that the child abuse allegations were a carefully crafted hoax. The phrase came from the grand jury’s own report. The jury indicted Alisha Owen for perjury.

Fall 1990. A separate federal grand jury reached the same conclusion. It found the abuse allegations unfounded and indicted Owen on eight counts of perjury. Two grand juries, one state and one federal, had now rejected the allegations and moved to prosecute an accuser rather than the accused.

1991: Convictions

February 1991. Lawrence King pleaded guilty to federal charges tied to the embezzlement. He was later sentenced to 15 years. The financial crime that opened the entire case was resolved in the ordinary way, by a plea and a prison term.

1991. Alisha Owen was convicted of perjury and sentenced to a prison term. Her conviction stood for the proposition the grand juries had reached: that the abuse statements Caradori had recorded were false. Owen maintained that her testimony was true.

1999: The Civil Judgment

February 5, 1999. A hearing was held in Paul A. Bonacci v. Lawrence E. King in U.S. District Court in Lincoln, Nebraska. Bonacci, one of the original accusers, sued King civilly, charging that King had abused him. King, by then imprisoned, did not mount a defense.

February 27, 1999. Judge Warren K. Urbom entered a $1 million default judgment for Paul Bonacci against King, $800,000 in compensatory damages and $200,000 in punitive damages. Urbom ruled that King’s failure to respond to the suit made the allegations true as to him. A default judgment of this kind establishes liability because the defendant did not contest the claims, not because the claims were tested and proven at trial. It is the document most often cited as proof that the abuse occurred, and it is the document whose legal mechanism is most often misstated.

What the Timeline Establishes

Two findings sit at opposite ends of this chronology and they are frequently merged. The credit union embezzlement was proven and punished. The child abuse allegations were investigated, rejected by two grand juries, and produced perjury convictions against the accusers rather than convictions against the accused. The 1999 civil judgment for Bonacci was a default, entered because King did not defend the suit.

Whether the grand juries were right is the question that the rest of this cluster examines, including the debate over whether the case was real or a hoax and the documentary Discovery commissioned and then pulled. The fuller record, including the witness depositions and King’s financial network, sits on the Franklin cover-up hub. The timeline above is the spine those documents hang on.

Sources

• Franklin child prostitution ring allegations — Wikipedia — Overview chronology with sourced dates
• Lawrence E. King Jr. — Wikipedia — The credit union seizure, embezzlement figure, and guilty plea
• “Credit Union Ex-Manager Pleads Guilty” — The Washington Post, Feb. 13, 1991 — Contemporaneous report of King’s plea
• Bonacci v. King — Justia / Eighth Circuit — Federal civil docket and parties
• John DeCamp, The Franklin Cover-Up — The advocates’ account of the case and the 1999 judgment