Financier J. William Oldenburg, former owner of the Los Angeles Express football team, has been accused of looting the now-defunct Utah savings and loan association he once controlled in a civil suit filed by the Federal Savings and Loan Insurance Corp.
The federal agency's suit charged that Oldenburg and eight co-defendants conspired "willfully, wantonly and maliciously to defraud" State Savings & Loan Assn. of Salt Lake City and to "convert to their own use and benefit" its assets.
The 64-page suit, filed Tuesday in U.S. District Court in Salt Lake City, seeks compensatory damages of $70 million and punitive damages of another $50 million, according to Elaine Weis, Utah's commissioner of financial institutions.
Neither Oldenburg nor his co-defendants, all former officials of State Savings, could immediately be reached for comment.
Oldenburg, a mortgage broker, relinquished control of State Savings in June, 1984, under regulatory pressure. The insolvent institution was shut down by federal regulators last April and deposits of $416 million were transferred to two other savings and loans.
That summer, the United States Football League took control of Oldenburg's Los Angeles Express, later selling it to a Denver real estate developer.
The suit filed this week accuses the defendants of fraud, conspiracy and breach of fiduciary duty in approving transactions between the savings and loan and a group of companies controlled by Oldenburg.
The principal allegation involves the 1984 sale of 363 acres of raw land in Richmond, Calif., from Oldenburg's Empire State West Corp. to State Savings for $55.7 million. The sum, the federal agency's lawsuit charges, is "more than 10 times the fair market value of the property, which was then and is now less than $5 million." The sale was based on inflated appraisals obtained by the defendants, the suit charged.
The federal agency's suit said the transaction occurred at a time when Oldenburg's companies, including his flagship, Investment Mortgage International Inc., "were on the brink of financial collapse" and in dire need of $16.5 million to repay two loans. As a mortgage broker, Investment Mortgage International originated commercial loans and sold them to institutional investors.
The suit also says Oldenburg purchased State Savings to help Investment Mortgage International secure loans for "high-risk" construction projects. Investment Mortgage International, whose lavish San Francisco offices were the talk of the town, raised hundreds of millions of dollars from financial institutions around the country for developments of everything from athletic clubs to resorts to condominiums in Hawaii, Washington, California, Texas and Utah.
Oldenburg, whose Investment Mortgage International collapsed last year amid charges of improper business dealings, has blamed negative publicity for his financial problems.