In her deposition, Bezdicek, Warner's former controller, says that she knew nothing of side business going on at Warner's. But Guthrie says she knew all about it, in part, because she would get the invoices.

"It was not a real hush-hush secret," Guthrie says.
And, in fact, several invoices contain what appear to be notes from Bezdicek to Guthrie directing him to take care of payment.

Recounting all this feels like fingernails across a chalkboard to Ron Warner, a gentlemanly man with a general distaste for conflict, especially in his own affairs.

He maintains that he did not have a clue about the business that was kept off Warner's books. The reason, Warner says, is that he was not seeing accurate financial statements for the business. He says that a later audit of the books, which is still under way, indicates that the expenses from the work that were not logged through Warner's books were placed into a "work in progress" account.

That account is an asset account, which would make it appear as though it were incoming business, rather than expenses.

"I look at the financial statement and think things aren't so bad because we've got this business coming in," Warner says.

Ron Warner was literally not minding the store. Warner's books were not audited for 1991 or 1992 because the firm had not paid the CPA. Warner says he didn't know because, frankly, he wasn't there. He was trying to get Warner Imports going, he was traveling, he was involved in community activities and he trusted his employees.

Warner's has banked with Valley National Bank, now Bank One, for more than 35 years. Guthrie and Ebbett banked there, too.

As Kirk Guthrie's personal business began to grow, he spoke with a Valley National Bank operations supervisor named Hazel Bedell and explained to her that he was taking outside jobs, for which he received money from clients and, in turn, paid suppliers.

Guthrie, in a sworn affidavit filed in the Warner's case against him, states that he ran about $1 million through his personal checking account in one year, most of which was related to the design work he was doing apart from Warner's.

Canceled checks and bank records for Guthrie indicate that he routinely deposited large checks--some for more than $100,000--from clients drawn on accounts from other banks and had same-day access to those funds. In some cases, the checks were drawn on out-of-state banks.

He says that he explained to Bedell early on that, because of the nature of his business, he had to have funds cleared immediately to pay suppliers.

And, in fact, Guthrie's bank records show that he was overdrawn several times on his account.

This arrangement is at the crux of the vicious fight Ron Warner began with Bank One shortly after Warner fired his employees in late 1992.

In the suit, Warner alleges that the bank financed his employees' side businesses by allowing them to cash and deposit checks through the bank and get immediate access to funds in a manner outside of normal banking procedure.

Bank One, meanwhile, maintains it was doing nothing more than routine transactions for its customers, and that Warner is trying to dump his business problems at the doorstep of the bank.

Guthrie explains his banking routine this way:
"I always went to the same person, Hazel Bedell," he says. "I would always make my deposits with Hazel. Sometimes I put it in the night deposit slot. Sometimes I would go in the morning and give it to the teller at the drive-in window and ask them to deliver it to Hazel. She would know that these funds were to go into my account. It was a personal banker type of an arrangement."

Bedell's initials appear on many of the checks deposited into Guthrie's account.

"She would call me to tell me that the checks that I had put in there had been cleared," he says. "They didn't clear it immediately. She always would call."

Guthrie says that Bedell also called periodically to notify him that there were not sufficient funds in his account to cover the checks that were coming through.

In bankruptcy proceedings, Bank One and Warner's agreed that there were 30 phone calls per month among Warner's, Guthrie, Ebbett and the bank.

When Bedell was transferred to another branch in December 1991, both Guthrie and Ebbett moved their accounts with her. Ebbett says he followed her because Bedell was always very service-oriented.

Bedell is now a security investigator for Bank One.
In a June 12 affidavit, Bedell characterizes her relationship with Guthrie as less than he remembers it. "Occasionally, I would be called upon to authorize checks presented by Kirk Guthrie for deposit because the amount of such checks exceeded the Customer Service Representative's [teller's] limit."

Warner's disputes other deposits Guthrie made, as well.
In one instance, Guthrie deposited a $12,046.50 check made payable to Warner's into his account, taking $46.50 in cash back. The check had no endorsement on the back, and the teller who took the deposit had a $10,000 limit.

In an April 1993 letter to Warner's attorney, Bank One's attorney stated that "based on the information that we have received, it appears that the $12,000 check deposited by Mr. Guthrie into his account actually was money paid to Mr. Guthrie as reimbursement for advances that he had made on behalf of Warner's."

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It always warms my heart to see how a small business can develop into a million-dollar enterprise with sheer hard work and talent. But when that same business shatters, the feeling can be crushing. Still, this incident at Warner’s not only opened doors to queries, but also opened eyes to the dirty world of money-making.

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