Moriarty Case Banker Pleads Guilty

Former banking executive Floyd A. Walden pleaded guilty Tuesday to taking $230,000 in kickbacks from Orange County businessman W. Patrick Moriarty and not reporting that money on his income tax returns.

U.S. District Judge A. Andrew Hauk scheduled the sentencing of Walden, 46, for June 17 after accepting his guilty pleas to two counts each of income tax evasion and mail fraud.

Walden faces a maximum penalty of 20 years in prison and a $22,000 fine.

In outlining to Hauk the basis for the charges against Walden, Chief Assistant U.S. Atty. Richard Drooyan said:

“In the period between 1980 and 1982, Mr. Walden received in excess of $230,000 in cash from Mr. Moriarty . . . for assisting in obtaining loans for various real estate ventures and business entities. He (Walden) did not advise the bank of these payments and he failed to report this cash to the IRS.”

Failed to Pay $115,238

According to the federal grand jury indictment returned against Walden on April 11, he failed to pay $115,238 owed for the years 1980 and 1981.

Drooyan told the judge the mail fraud count stemmed from Walden’s mailing of a property appraisal Nov. 10, 1980, and another loan document March 26, 1981.

Over a period of several years, Walden was directly or indirectly involved in approving millions of dollars in loans for Moriarty and his various businesses, an investigation by The Times determined.

Approximately $20 million in loans approved by Walden while he was with California Canadian Bank are now in default.

Walden’s name first surfaced in connection with Moriarty when The Times reported that property records showed Moriarty as the owner of the $350,000 home in Menlo Park where Walden now lives.

A veteran of 20 years in the banking industry, Walden managed branches for California Canadian in Los Angeles and Orange before being transferred to the bank’s headquarters in San Francisco, where he was promoted to vice president in charge of commercial loans.

After he left California Canadian in April, 1982, bank investigators began scrutinizing the Moriarty loans that Walden had approved. Suspecting that crimes had been committed, officials of the bank turned over information to the Orange County district attorney’s office.

Prosecutor Drooyan said Tuesday that the only “deal” made with Walden, in return for his guilty pleas, was an agreement not to file additional mail fraud counts against him.

No Sentencing Deal

“No deal was made on sentencing and there is no understanding that he will cooperate with the ongoing investigation or testify at any future proceeding,” Drooyan told reporters after Tuesday’s court session.

Walden would not talk to newsmen but his attorney, Paul Meyer, said Walden was “tremendously relieved to get this over with . . . and we are confident that we will be able to give the probation officer a significant amount of material that will be favorable to him.” The lawyer would not reveal where Walden is currently employed.

Guilty pleas now have been entered by all seven people indicted so far in connection with the investigation of Moriarty’s activities by the FBI, the IRS, the U.S. attorney’s office and the Orange County district attorney’s office.

Six of those, including Moriarty, have pleaded guilty to a variety of charges including bribery and income tax evasion. The seventh defendant, Las Vegas gambling figure Frank J. Sansone, was convicted by a jury of operating an illegal gambling business and bribery-related mail fraud counts.

Two Await Sentencing

Prison terms of less than a year and fines ranging from $2,500 to $20,000 have been meted out to Sansone and four City of Commerce officials who received secret shares in a poker casino for granting a casino license to Sansone and Moriarty. Still awaiting sentencing are Moriarty and his longtime business associate, Richard Raymond Keith, both of whom made deals to cooperate in the continuing investigation of state legislators and city councilmen who allegedly received favors from them in the form of prostitutes, money, vehicles, vacation housing and the hiring of relatives.

Moriarty has pleaded guilty to seven counts of mail fraud, four related to his bank dealings with Walden and the other three connected with the scheme to bribe City of Commerce officials.

Keith entered a plea of guilty to charges that he failed to pay income tax on more than $1 million in “commissions” he received from Moriarty. The cash payments from Moriarty to Walden were channeled through Keith, who also has told investigators that he passed money and provided prostitutes to politicians at Moriarty’s behest.