BEHIND THE NEWS:

Two upcoming, high-profile business trials now are off the schedule, thanks to a guilty plea from wheelerdealer James T. O’Neal Jr. and a settlement by former Conseco Inc. executive Rollin Dick. O’Neal, 60, a Carmel native accused of swindling some of Indianapolis’ wealthiest investors out of millions of dollars, just before Christmas reached an agreement with prosecutors under which he pleaded guilty to two of the 82 felony counts against him. He could face up to six years in prison. Dick, 74, last month reached a proposed settlement of a civil accounting fraud lawsuit filed two years ago by the U.S. Securities and Exchange Commission. The pact remains confidential, pending approval by the five-member SEC panel in Washington. Such agreements typically include various sanctions, including a fine.

The other defendant in the case, former Conseco Chief Accounting Officer James Adams, 46, also has reached a proposed settlement that has been forwarded to Washington for approval. Attorneys for Dick, Adams and the SEC declined to comment last week.

Both trials had promised an abundance of drama. Former Conseco CEO Stephen Hilbert had been expected to take the stand to defend his former colleagues, and a range of business leaders had been expected to unleash withering testimony against O’Neal.

According to prosecutors, O’Neal diverted nearly $7 million from the Carmel-based firm he founded, American Public Automotive Group, to fund a lavish lifestyle for himself and his family. One Christmas, for instance, he doled out $90,000 in gift checks to his family.

O’Neal formed American Public in the early 1990s and over several years raised $18 million from 58 investors, including the Simon family, developer Michael Browning, music promoter David Lucas and City Securities Corp. executive James Merten.

O’Neal’s pitch: American Public would open car dealers adjacent to shopping malls nationwide, capitalizing on their huge base of customers. But it never happened. The company in 1998 ran out of money and slid into bankruptcy, without owning a single dealership.

After years of on-again-off-again investigations, a federal grand jury in Orlando in July 2004 indicted O’Neal on 82 counts of money laundering, mail fraud and filing false federal tax returns. O’Neal, now an Orlando resident, had denied the charges, saying he borrowed money from the company with the full intention of paying it back.

But under a plea agreement accepted by Judge John Antoon II on Dec. 23, O’Neal acknowledged he’s guilty on two counts of filing false tax returns. His sentencing is scheduled for March 9.

“After all we’ve been through, I’m happy that it’s over,” said Dr. Alan Cohen, CEO of the National Deaf Academy in Mount Dora, Fla., and one of the most outspoken investors. “I’m happy that he’s guilty, and I’m happy he’s going to jail.”

O’Neal’s trial had been scheduled to start this month and last six weeks. If a jury had found him guilty on all counts, he faced up to 769 years in prison. Assistant U.S. Attorney Randy Gold declined to discuss why prosecutors accepted the plea agreement.

Under the agreement, O’Neal pledged to make restitution to his victims, to the best of his ability. However, he claims to be broke, and he’s being represented by a public defender. The public defender could not be reached last week.

Resolving Dick’s problems

If the SEC approves Dick’s settlement, the Zionsville resident finally will have put to rest a maelstrom of legal woes stemming from his service as chief financial officer of Conseco.

According to the SEC’s lawsuit, Dick and Adams masked Conseco’s burgeoning financial problems in 1999 by overstating profit by $367 million. In court papers, both men denied wrongdoing.

Dick and Hilbert resigned under pressure in April 2000, weeks after the company announced an earnings restatement that wiped out 40 percent of 1999’s profit.

A federal criminal investigation of the same accounting matters ended in December 2004 with the U.S. Attorney’s Office in Indianapolis declining to bring charges against Dick, Adams or anyone else.

Three months later, Dick and Conseco reached a settlement resolving all litigation over the nearly $100 million the company said he owed in connection with loans he used to buy company stock. The stock ended up worthless after Conseco slid into bankruptcy court in December 2002.

Terms of the settlement weren’t disclosed. That deal spared Dick and his wife, Helen, from what appeared likely to be a bruising trial. Conseco had accused the pair of a fraudulent scheme aimed at putting the family fortune beyond the company’s reach.

Conseco charged Dick had transferred much of his wealth to his wife. In addition, the company took aim at a $7.5 million trust the couple set up in 2000 in a remote South Pacific island nation known as a haven for debtors.