Ellsworth takes stand in lawsuit with Native corporation

Posted: Thursday, September 20, 2007

ANCHORAGE - A businessman accused of taking $40 million from an Alaska Native corporation was on the witness stand this week in Anchorage Superior Court.

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John Ellsworth ran Alaska Interstate Construction, in partnership with Cook Inlet Region Inc., and Nabors Industries, of Houston, until 2005.

An audit by CIRI and Nabors alleges Ellsworth owes them for overbilled jet expenses, lost profits from an abandoned Exxon Mobil project in Russia, lost contracts due to illegal competition by Ellsworth after he was fired, undeserved bonuses, and personal credit-card charges.

Ellsworth told jurors that he never bothered to read AIC's multimillion-dollar business contracts and operating agreements when he signed them and did a poor job of keeping track of his company's financial records.

Ellsworth admitted to improperly overcharging his ex-business partners up to $2 million in expenses associated with the purchase and use of corporate jets.

And he agreed that he used AIC money to fly a BP oil executive, plus his own friends and relatives, to the Super Bowl on company jets.

But the 55-year-old, who faced more questioning Wednesday, denied the most serious accusations against him, including lying under oath, destroying and concealing documents and bribing employees and business associates, including former CIRI chief executive Carl Marrs, with money and free trips.

CIRI and Nabors have refused to pay Ellsworth for his 20 percent stake in AIC, worth as much as $12 million, and they sued him in 2005. Ellsworth has counter sued for $10 million, plus punitive damages.

Jurors will have more than seven weeks of testimony and trial exhibits to consider.

Ellsworth said his business partners didn't complain about how he ran the company. He said he was "flabbergasted" when they filed a lawsuit, because he had created millions of dollars profit for them.

But CIRI and Nabors say Ellsworth over-billed AIC to enrich his own company, Pacific Diversified Investments, Inc., which leased jets to AIC. CIRI and Nabors say their audit shows Ellsworth committed fraud against them from 1995 to his firing in 2005.

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