Calumet was unable to repay the loan, and declared bankruptcy in 1991. Federal Deposit Insurance Corp. Cihak was arrested and convicted on 32 charges related to bank fraud. He is in a federal penitentiary in Michigan. Seven defendants in addition to Cihak have been convicted in connection with the First City Bank investigation. Defense attorneys will argue that their clients aren't criminals, just businessmen who invested in thoroughbreds and oil, and struggled after the horse and petroleum industries fell on hard times.
Defense attorneys plan to take about four days to present their side.
Lundy's sister, Kathy Lundy Jones, and his son, Robert Lundy, will testify for the defense. Matthews' attorney, Dan Cogdell, told jurors to expect a crash course in the thoroughbred industry, and a little sex education too. Only two of them had heard of Calumet Farm. Prospective juror No. 29 was born and raised in Covington, but she admitted she would have needed the crash course. She wasn't selected.