From Community Credit Union to Political Power Hub
In the 1980s, Franklin Community Federal Credit Union in Omaha, Nebraska, was supposed to be a small institution serving low‑income neighborhoods.
Under its manager, Lawrence “Larry” E. King Jr., it became something very different: a flashy operation tied to political powerbrokers and Republican Party events.
King drove luxury cars, threw lavish parties, and even sang the national anthem at the 1984 Republican National Convention — all while federal regulators later said tens of millions of dollars were quietly disappearing from Franklin’s books.
When the credit union collapsed in 1988, investigators uncovered massive financial fraud — and, almost immediately, a second wave of allegations that would turn the case into one of the most controversial conspiracy stories of the late 20th century.
Case Snapshot
- Location: Omaha, Nebraska, centered on Franklin Community Federal Credit Union (Franklin Community F.C.U.) and associated sites like Boys Town and alleged party locations
- Timeframe:
- Financial issues and fraud: primarily late 1970s–1988, collapse in November 1988
- Child‑prostitution ring allegations: surfaced 1988–1990
Core elements:
- Financial crimes (established):
- Larry King ran Franklin into the ground through embezzlement, secret ledgers, and fraudulent certificates of deposit.
- Regulators estimated roughly $34–40 million in funds were missing, making it one of the largest credit‑union failures in U.S. history.
- Child prostitution / trafficking allegations (disputed):
- Claims that King and others used Franklin and associated networks to run a child sex ring involving foster children, Boys Town youth, and flights to parties where minors were abused by powerful figures.
- Allegations expanded to include satanic ritual abuse, drug trafficking, and links to high‑level politicians and even CIA operations in some retellings.
- Official findings:
- Separate Nebraska state and federal grand juries in 1990 concluded the child‑prostitution ring allegations were unfounded and described them as a “carefully crafted hoax.”
- Several accusers were indicted on perjury; one, Alisha Owen, was convicted and served more than 4 years in prison.
- King and other Franklin officers were prosecuted and convicted for fraud and related financial crimes, not sex‑trafficking.
- Status:
- Financial fraud: resolved with convictions and prison sentences.
- Child‑prostitution and cover‑up allegations: still fiercely debated, with some authors and activists insisting the grand juries and media buried the truth; mainstream legal bodies and many journalists regard the ring story as unproven conspiracy.
The Collapse of Franklin Credit Union
Franklin Community F.C.U. began as a community‑oriented institution in North Omaha, serving largely Black and low‑income clientele.
Once Larry King took over, deposits and loans exploded on paper — along with his personal lifestyle.
Regulators later found that King kept a secret set of books, sold fake or inflated certificates of deposit, and moved money between accounts to hide huge shortfalls.
By November 1988, the National Credit Union Administration (NCUA) had seen enough: they raided Franklin, shut it down, and revealed that tens of millions of dollars were missing.
Civil suits and federal investigations followed, eventually leading to King’s 1991 guilty plea to federal fraud and embezzlement charges tied to roughly $39 million in misused funds.
He received a 15‑year prison sentence, and Franklin’s collapse became a textbook example of credit‑union failure and regulatory breakdown.
Allegations of a Child Prostitution Ring
While auditors and the NCUA focused on missing money, a different kind of allegation surfaced.
Starting in 1988, some youth and former wards of Boys Town — a well‑known Catholic youth home near Omaha — claimed they had been trafficked and abused by adults connected to Franklin and to powerful Nebraskan and national figures.
Key themes in their accounts included:
- Being taken from foster care or youth homes to parties where drugs and alcohol were provided.
- Claims that some parties involved sexual abuse of minors by businessmen, politicians, and law‑enforcement officials.
- Allegations that children were sometimes flown to other cities, including Washington, D.C., for further exploitation.
The accusations centered on King as the alleged organizer, claiming he used Franklin money and networks to host these events.
Some narratives — especially in later books and documentaries — grafted on more sensational details, such as satanic rituals, blackmail operations, and connections to national political conspiracies.
Legislative Investigation and Growing Conspiracy Theories
In response to both the financial collapse and the abuse allegations, the Nebraska Legislature formed a special investigating committee in late 1988, often referred to as the Franklin Committee.
State senator Loran Schmit chaired the panel, with Ernie Chambers as vice chair.
As the committee began hearings, conspiracy theories flourished:
- Some claimed the case linked to devil worship, ritual murder, cannibalism, and drug trafficking.
- Others alleged connections to Iran‑Contra money‑laundering and CIA operations.
- Journalists and lawmakers received anonymous tips and documents naming high‑profile figures, sometimes with little corroboration.
The atmosphere around the Franklin Committee became highly charged.
Former state senator John DeCamp, who later wrote The Franklin Cover‑up, sent a memo to reporters listing several prominent names he said were involved, a move for which he was later admonished.
Grand juries would ultimately take a very different view.
Grand Juries Call It a “Carefully Crafted Hoax”
In 1990, two grand juries — one in Douglas County (Omaha) and one federal — issued reports on the Franklin allegations.
The Douglas County grand jury concluded:
- The claims of a broad child‑prostitution / ritual‑abuse ring were baseless.
- The stories were described as a “carefully crafted hoax,” possibly originating with a disgruntled former Boys Town employee who had spread rumors and fueled accusations.
The federal grand jury similarly found the child‑trafficking allegations to be unsubstantiated.
It indicted one key accuser, Alisha Owen, on multiple counts of perjury for statements she made about being abused by high‑profile men.
She was convicted and served over four years in prison for refusing to recant.
Two other alleged victims, Troy Boner and Danny King, later recanted their original statements, saying they had been pressured or had exaggerated; Owen and another accuser, Eulice Washington, did not recant, leading to deep splits over whom to believe.
For officialdom, the takeaway was clear:
- Franklin was a major financial fraud,
- but the alleged elite sex‑ring was, in their view, a fabrication or exaggeration driven by rumor, personal grudges, and opportunism.
Books, Lawsuits, and an Enduring Conspiracy Narrative
The grand jury conclusions did not end the story.
In 1992, former senator John DeCamp published The Franklin Cover‑up, arguing that the abuse allegations were true and that the state and federal investigations had been manipulated to protect powerful people.
DeCamp and other authors, such as Nick Bryant with The Franklin Scandal, pointed to:
- Inconsistencies in the grand jury reports.
- The severity of punishment for accusers like Alisha Owen.
- Civil suits where some victims, including Paul Bonacci in a related context, received money from alleged abusers.
Critics of the conspiracy view counter that:
- The most sensational claims (ritual murder, satanic cults, national political pedophile rings) lack solid corroboration and often rely on hearsay or heavily disputed testimony.
- Some of the people who amplified the allegations had political or personal motives, including revenge against state GOP figures or attempts to gain attention.
- The case emerged at the height of the 1980s and early‑’90s “Satanic panic”, when a number of high‑profile abuse claims were later debunked as moral panics or therapy‑induced false memories.
To this day, Franklin sits at a crossroads between two narratives:
- One sees a massive cover‑up of entrenched abuse and elite protection.
- The other sees a tragic mix of real financial crime, rumor, and overblown conspiracy theories amplified by the cultural climate of the time.
Why This Case Is on True Crime Maps
On True Crime Maps, the Franklin pin isn’t just about what definitely happened — the financial fraud and collapse of a credit union — but also about how stories of power, abuse, and cover‑ups grow in the spaces where evidence is thin and trust is already broken.
It’s a case where:
- Either powerful people were shielded from exposure,
- or sensational allegations spiraled into a moral panic that sent innocent people to prison for perjury.
Either version represents a form of conspiracy — and that’s why Franklin remains one of the most argued‑over scandals on the map, decades after the credit union’s doors were locked for good.
