Franklin child prostitution ring allegations

The Franklin child prostitution ring allegations began in June 1988 in Omaha, Nebraska, when multiple prominent Nebraska political and business figures were accused of involvement in a child sex trafficking ring. The allegations attracted significant public and political interest until late 1990, when separate state and federal grand juries concluded that the allegations were unfounded and the ring was a "carefully crafted hoax."

History
In 1988, state and federal authorities began looking into allegations that prominent citizens of Nebraska, as well as high-level U.S. politicians, were involved in a child prostitution ring. Alleged abuse victims were interviewed, who claimed that children in foster care were flown to the East Coast of the United States to be sexually abused.

The accusations primarily centered on Lawrence E. King Jr., who ran the now defunct Franklin Community Federal Credit Union in Omaha, Nebraska, and alleged that King hosted “lavish parties at which minors were sexually abused”. King was a rising figure in the Republican Party before the investigation, and owned multiple houses in Nebraska along with a house in Washington D.C. which he rented. The Franklin Credit Union was raided by authorities investigating the embezzlement of tens of millions in November 1988.

The Nebraska Legislature organized a committee to look into both the credit union embezzlement and the child prostitution allegations named the Franklin Committee, led by state Senator Loran Schmit and Ernie Chambers acting as vice chair. Numerous conspiracy theories spread after the committee was announced, claiming that the alleged abuse was part of a widespread series of crimes including devil worship, cannibalism, drug trafficking, and CIA arms dealing.

In July 1990, private investigator Gary Caradori, hired by the Franklin Committee to investigate the allegations, died along with his 8-year-old son when his plane disintegrated mid-air near Chicago. Foul play was suspected by Caradori's brother and state Senator Loran Schmit, but was not proven by investigators. No definitive cause for the crash has been established.

The Nebraska State Foster Care Review Board submitted the results of a two-year investigation into the alleged physical and sexual abuse of foster children to the executive board of the Nebraska Legislature, who were investigating reports of child sexual abuse linked to the credit union. After investigation, a grand jury in Douglas County, where Omaha, Nebraska is situated, determined the abuse allegations were baseless, describing them as a "carefully crafted hoax" and indicting two of the original accusers on perjury charges. The grand jury suspected that the false stories originated from a fired employee of Boys Town, who might have "fueled the fire of rumor and innuendo" because of personal grudges, but refused to name someone as the source of the stories.

A federal grand jury also concluded that the abuse allegations were unfounded and indicted 21-year-old Alisha Owen, an alleged victim, on eight counts of perjury. Owen served $4 1/2$ years in prison. The same federal grand jury later indicted King and multiple officers of the credit union with embezzlement of funds. In 1991, King pled guilty to assisting in embezzling $39 million and was sentenced to 15 years in prison. In spite of the findings of the grand jury, Paul Bonacci, a witness who was also charged by the grand jury but ultimately not convicted, filed a civil suit against King the same year. Bonacci won the case after King failed to defend himself, leading the judge to award a default judgement.