Sun Savings Files Suit Against Ex-Chairman

Under pressure from federal regulators, Sun Savings & Loan Assn. on Monday filed a lawsuit against former Chairman Daniel W. Dierdorff, alleging that Dierdorff defrauded the company by making “imprudent loans” to customers who, in turn, gave him “kickbacks” and other gifts.

Dierdorff, already under investigation by a federal grand jury, allegedly received more than $209,000 in kickbacks and gifts both from Sun customers who had borrowed money from the University City-based thrift and from brokers who received loan fees that were paid by Sun and approved by Dierdorff.

The lawsuit also alleged that Dierdorff “artificially” inflated Sun’s short-term earnings to boost his salary incentives.

The lawsuit, filed in U.S. District Court, seeks $5 million in punitive damages. In addition, Sun has alleged that Dierdorff violated the Racketeer Influenced and Corrupt Organizations Act, so if Dierdorff is found guilty, the $209,000 in actual damages could be tripled.

‘Nothing Improper’

Dierdorff could not be reached for comment. His attorney, Arthur Fine, said he had not yet received a copy of the suit. “Dan’s position is that he did nothing improper (and that he) received nothing personal beyond the salary and compensation paid by Sun,” Fine said.

Federal regulators strongly suggested that Sun file suit against its former chairman and chief executive, according to sources familiar with lawsuit. “They said we would be irresponsible if we didn’t sue,” said one Sun source.

Nonetheless, at a Sun board meeting Monday morning, two Sun directors argued against filing the suit. They were financial consultant Clifford A. Lindroth and consultant Ted Van Leeuwen, according to a Sun source.

Dierdorff has been under investigation by the U.S. attorney’s office here since early summer. The case was subsequently presented to a federal grand jury, which is now investigating.

Timing of Suit

After months of internal board disputes and frustration over mounting bad loans, Dierdorff resigned as Sun president and chief executive on Sept. 3, 1984. He stepped down as chairman on Oct. 22, 1984.

The timing of Sun’s lawsuit was not coincidental: As part of Dierdorff’s resignation agreement, Sun agreed that no legal action would be taken against him after Oct. 21, 1985. Sun’s action, however, opens the door for Dierdorff to file legal actions of his own.

Also named in the lawsuit were Dierdorff’s wife, Mary, who Sun alleges used her position as vice president “improperly and without authority” to charge more than $10,000 in personal expenses to Sun, including charter aircraft trips, meals, personal clothing, flowers and entertainment.

The lawsuit also alleges that Dan Dierdorff used Sun funds to buy a $2,300 steer for his daughter in March, 1984, at the Imperial Valley Fair Livestock Auction.

Investigative Report

Several Sun customers who reportedly received loans from the company were named in the suit, including San Diego Chargers business manager Pat Curran; Rancho Santa Fe businessman Lee Dodson; loan broker Leo Netzel; M&R; Investment Co., which owns the Dunes Hotel in Las Vegas, and John Petroff, an associate of Dunes’ controlling shareholder Morris Shenker.

The lawsuit is based on a 13-page investigative report conducted last year for Sun by the San Diego law firm of Fredman, Silverberg & Lewis.

The suit, filed by the law firm, alleges that Dierdorff created a secret checking account under the fictitious name of Dan Danzer and that Dierdorff received free travel and entertainment from Sun customers who had received loans he approved. Dierdorff used the Danzer account to deposit the $209,000 in alleged kickbacks, according to the lawsuit.

The lawsuit alleges that M&R; Investment, which defaulted on a $1.6-million Sun loan, gave Dierdorff free air travel to Las Vegas, as well as an unsecured line of credit, free room, food and entertainment at the Dunes hotel.

‘Things of Value’

In addition, the suit claims that Petroff, who defaulted on more than $40,000 in loans made by Sun, paid for Dierdorff’s travel to Las Vegas as well as for food, entertainment and “things of value from Petroff.”

The lawsuit alleges that Curran, Netzel, Dodson and two of his companies made kickbacks to Dierdorff in exchange for receiving finders’ fees or brokerage fees. Sun does not know the exact amount of those fees, according to the lawsuit.

Neither Dobson nor Netzel could be reached for comment.

Curran called the allegations “ridiculous.”