Judge Upholds Takeover of S&L; After Owner’s Death

An Orange County judge on Tuesday upheld a state agency’s takeover of North America Savings & Loan Assn., which was owned by a Westminster dentist who died in a car crash about 9 1/2 hours before the takeover.

Superior Court Presiding Judge Harmon G. Scoville immediately sealed all documents in the case for two weeks, preventing public inspection of allegations made by the California Department of Savings and Loan.

William J. Crawford, the state S&L; commissioner, said the apparent causes for putting the institution in a conservatorship were “falsification of books, records and documents and inflated asset values.” He said North America Savings also violated internal control procedures and state laws and regulations.

Crawford would not elaborate on the claims yet, saying that it would take “at least a month” to determine the extent to which the S&L;’s financial condition was impaired.

Nor could he say yet how much the institution had in deposits and what amounts were in accounts exceeding insured limits of $100,000 per account. He said the S&L; was primarily a “money desk” that solicited high-interest deposits from out of state.

The institution had lost $8.9 million in the first 11 months last year and had a negative net worth of $1.5 million at the end of November, the agency said in taking over the S&L; last Friday. It had $219 million in assets at the end of November.

Its owner, Duayne D. Christensen, was killed about 6:30 a.m. Friday when his car missed a curve on the Corona del Mar Freeway and slammed into an abutment. He was under agency orders to come up with $7 million in new capital for his S&L; by noon Friday and had been up all night trying to find the resources.

The Orange County coroner’s office has ruled tentatively that his death was accidental.