Banker in Bribe Case Jailed on Tax Counts

Times Staff Writer

U.S. District Judge A. Andrew Hauk refused Monday to send former banking executive Floyd A. Walden to prison for taking $230,000 in kickbacks from Orange County businessman W. Patrick Moriarty but then imposed a four-year term on Walden because he did not not pay federal income tax on the bribes.

“Taking that money from Moriarty was, well, more or less succumbing to temptation,” Hauk said, “but failure to pay those taxes is one of the prime crimes and cannot be countenanced.”

Chief Assistant U.S. Atty. Richard Drooyan had argued that a substantial prison term was warranted because of the large amount of kickback money involved and “the need to send a message to bankers that this sort of conduct will not be tolerated.”

After imposing the sentence, Hauk said from the bench, “I know the U.S. attorney’s office will not be happy with this . . . but I think it is fair, maybe lenient, but fair.”


Walden did not speak at the hearing until its conclusion, when Hauk said, “I hope you will not get in any more trouble.”

“You can be certain of that,” the ex-banker replied.

Over a period of several years, Walden, an executive at California Canadian Bank, was directly or indirectly involved in approving millions of dollars worth of loans for Moriarty and his various businesses.

About $20 million in bank loans involving Moriarty are now in default.


Paul Meyer, Walden’s attorney, told Hauk during Monday’s hearing that “there was no evidence Walden made any false representations to the bank” in granting loans to Moriarty.

“Other than not to tell them he was taking bribes,” Hauk interjected.

Connection in Home

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 County, 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.

In addition to the four-year prison sentence for two counts of tax evasion, Hauk fined the 46-year-old banker $20,000 and ordered him to pay the $115,238 he owes in taxes for 1980 and 1981.

Restitution Ordered


On the two kickback counts, $2,000 in fines were levied against Walden and he was ordered to make restitution, not to exceed $100,000, on losses California Canadian Bank may suffer on loans made to Moriarty.

Moriarty has pleaded guilty to a variety of mail fraud charges, including making illegal campaign contributions to politicians and paying kickbacks to Walden. He is awaiting sentencing.