Kickbacks Alleged : Sun Savings Files Suit Against Ex-Chairman

Under pressure from federal regulators, Sun Savings & Loan Assn. last week 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.

Later in the week, two Sun Savings & Loan Assn. directors called for a special board meeting Monday to “express disapproval” over the lawsuit filed against Dierdorff.

Directors Cliff Lindroth, one of two board members who voted against filing the suit, and Richard Raimann, an Orange County accountant who voted in favor, called the meeting because they are “unhappy” with both the lawsuit and with what they claim are “leaks of information” to various newspapers, according to a source close to the directors.

John McEwan, Sun president and chief executive, acknowledged that a special board meeting has been called but said that its purpose is to “discuss some capital-infusion alternatives we’re pursuing.”

Some of the directors are reportedly upset that the Dierdorff lawsuit was filed in federal court at 10:25 a.m., at least 30 minutes before directors approved the filing.

Sun sources said the suit was filed early because of a “miscommunication” with the company’s outside law firm, and that the suit was not supposed to be filed until the board approved the action.

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 the Sun board meeting last Monday morning, two Sun directors argued against filing the suit. They were financial consultant 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.

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.

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.