Ex-CEO gets prison after gambling binge

MONTGOMERY, Ala. (AP) — The former president and chief executive officer of an Alabama steel company has been sentenced to six years in prison for gambling away money during his company’s bankruptcy case, federal prosecutors announced.

Kennon Whaley, 51, had been convicted by a federal jury of two counts of concealment of bankruptcy assets, The U.S. Depart­ment of Justice said in a statement. The crimes happened when his company, Montgomery-based Southeastern Stud & Components, was in Chapter 11 bankruptcy proceedings, prosecutors said.

Evidence at Whaley’s trial showed that during the bankruptcy process, he redirected a $260,000 insurance payment intended for the company in 2010 to pay off a personal gambling debt, authorities said.

In 2010, Whaley had traveled to the Wynn Las Vegas Casino, racking up a $100,000 gambling debt during a four-day trip, the prosecutors said.

Whaley improperly used the company’s insurance money to pay back his casino debt, and directed an employee to falsify documents regarding the money, authorities said.

“The casino records also showed that once his debt was paid off in October of 2010, Whaley made a return trip to Wynn Las Vegas during which he spent over $20,000 at the casino and sent a limousine
to pick up his wife at the airport,” federal authorities said in a statement. “At that time, Southeastern Stud was still in bankruptcy and approximately 70 percent of its employees had lost their jobs.”