Criminal Probe Pending : Anxious Depositors Swamp Maryland S

Hundreds of anxious depositors waited in long lines Friday for the second day in a row to withdraw money from Maryland’s second-largest privately insured savings and loan, worried about reports of a management shake-up and a pending criminal investigation.

Despite assurances Thursday by top officials from Old Court Savings & Loan Assn., the state and the thrift institution’s private insurer, even larger numbers of depositors showed up Friday than Thursday to close out accounts.

An estimated 200 people were waiting at the Randallstown branch in suburban Baltimore before it opened in a line that stretched around the parking lot, while huge lines also were reported at several other branches, including one in the city.

The thrift institution tried to calm the fears of depositors and make them as comfortable as possible, serving them punch and pastries at one location.

“The fact of the matter is there’s really no need for this,” said Heidi Hutchinson, Old Court’s public relations director. “They’re losing interest and they’re really hurting themselves.”

Concern over the association’s stability was heightened Friday when it was disclosed that state Atty. Gen. Stephen H. Sachs planned to investigate a possible conflict of interest within Old Court’s management. Sachs refused to elaborate. Gov. Harry Hughes authorized the criminal investigation before he left on a trip to Israel, Sachs said.

Large numbers of depositors rushed to the savings and loan Thursday following news reports that John Faulkner Jr. had been named chief operating officer to help straighten out what the private insurer described as “increasingly serious difficulties with existing management.”

The hardest-hit branch was the one in Randallstown, which stayed open until 11 p.m. Thursday.

“I guess we’re all concerned or we wouldn’t be here,” said a man waiting Friday outside the downtown branch. The depositor, who declined to give his name, said he was making a withdrawal because of “the hint of possible criminal prosecution by Sachs.”

Hutchinson called the probe a “wonderful opportunity to clear the air.” An investigation would show that the problems facing Old Court, which has nearly $840 million in assets, are unrelated to its financial solvency, she said.

Depositors were withdrawing funds unnecessarily, said Charles C. Hogg II, president of the Maryland Savings Share Insurance Corp., which insures the more than 100 state-chartered thrift institutions.

“We are all highly sensitized because of recent events in Ohio” where the state’s 69 privately insured savings and loan associations were temporarily closed earlier this year, Hogg said Thursday.

There were no limits on the amount that could be removed from accounts, although cashier’s checks were issued for large withdrawals.