$20-Million Fraud Probe Focuses on Santa Ana Thrift

The FBI and the state attorney general’s office said Wednesday they are investigating possible fraud and embezzlement involving up to $20 million at North America Savings & Loan Assn., the Santa Ana institution that was seized by regulators Jan. 16.

The state’s investigation, spurred by the state Department of Savings and Loan after it seized the $219-million association, is focusing on the role played by the late owner’s close friend and business confidante, Janet F. McKinzie, in the institution’s activities, according to government sources.

As the government investigation continues, the last will and a trust of the late owner, Duayne D. Christensen--signed just three days before he died in a traffic accident--have been filed in a Douglas County, Nev., court. The documents show that he left all of his assets to McKinzie.

“We have opened an investigation on possible bank fraud and embezzlement,” said Fred Reagan, a spokesman for the FBI in Los Angeles. He said it is too early to identify any suspects.

The association’s former president, Brooks A. Miller, said an FBI agent called him Wednesday morning to ask about boxes of files thought to be missing from the office McKinzie used. Miller said McKinzie, a paid consultant to North America, often brought “three, four, five briefcases” to work as well as boxes of files. She also took work home with her, he said, but added that he did not notice anything out of the ordinary.

McKinzie, through a guard outside her gated community in Newport Beach, said Wednesday she was under a doctor’s care and could not talk to reporters. Her attorney could not be reached.

Steve Adler, chief of the state attorney general’s major fraud unit in San Diego, said his office was gathering evidence when federal regulators moved in Friday and put North America into receivership. He said he will be turning over his information to the U.S. attorney’s office and will offer “any assistance that’s appropriate.”

Christensen, 56, was killed in a single-car crash Friday morning on the Corona Del Mar Freeway. The coroner’s office has tentatively ruled his death an accident.

Christensen had a noon deadline on Jan. 16 to raise $6 million to prop up his institution’s sagging capital base. The S&L; lost $8.9 million in the first 11 months of last year and had a negative net worth of $1.5 million by the end of November. State regulators recently put the net worth at $6.5 million in the red.

Both the will and the trust were filed at the Douglas County District Court Clerk’s office in Minden, Nev., on Jan. 21, the day Christensen’s body was buried in a Newport Beach cemetery. McKinzie signed a document Jan. 20 stating she will serve as trustee. She also was named as executrix of the will.

One of Christensen’s three children--Duayne Daniel Christensen, who has admitted in court documents to using narcotics and has been convicted of armed robbery, burglary and lesser charges--was left out of the will and trust. His other two children, a daughter and another son, will receive whatever assets are left after the deaths of McKinzie and Virginia Walker of Elk Grove, another close friend of Christensen’s and the successor to McKinzie’s interest in the will and trust, according to documents.

Besides giving her his assets, Christensen deeded over to McKinzie a posh Newport Beach home in June, 1984.

Net Worth Unclear

Christensen, a Westminster dentist, had said in a financial statement given to Imperial Bank last spring that his net worth was $62.5 million. But his real net worth is not yet known, as state and federal officials continue to look into what one state S&L; regulator called the “most massive fraud” he had ever seen in an S&L;’s operations.

The younger Duayne Christensen, 31, is awaiting trial in Orange County Superior Court on six counts of armed robbery, including holdups of three banks and a San Juan Capistrano country club golf shop, that were committed in a four-week period in May and June. He had been returned to state prison for violating the terms of parole on an earlier armed robbery conviction when Orange County authorities linked him to the 1986 robberies, Deputy Dist. Atty. Arnold Westra said.

In court papers filed in connection with the conservatorship, the state S&L; agency said the elder Christensen falsified records, forged signatures and made questionable payments totaling more than $4 million to himself and McKinzie.

Imperial Bank has sued McKinzie, alleging that she aided the dentist in getting loan extensions based on falsified documents, which included a fake $2.7-million certificate of deposit in Christensen’s name at North America Savings. State regulators said more than 160 fake CDs are involved in its investigation.

Stock Used as Collateral

In Alaska, where the S&L; was heavily involved in real estate loans, the First Interstate Bank of Alaska was holding phony stock certificates, supposedly worth $1.4 million, for shares in North America Savings owned by McKinzie’s sister, Rebecca Thrall, according to the state S&L; agency’s court documents. The documents said Thrall used the stock certificates as collateral on a loan, which went into default.

Thrall, a mortgage broker in Anchorage, had put together numerous loans for the S&L;, said Miller, the association’s former president. Because of the oil glut, dozens of homeowners and developers walked away from mortgage payments and real estate projects, leaving the institution with up to $30 million in potential losses, a state S&L; official said.

William J. Crawford said that since he became the state S&L; commissioner two years ago he also had been grappling with Christensen over a condominium project in the Lake Tahoe area that the association was trying to turn into a time-share resort while also trying to sell it.

Crawford’s chief deputy, William Davis, said Christensen had built the 20-unit luxury condominium project for $1.8 million and contributed it to the S&L;’s capital base at a price of more than $14 million, which would allow the institution to boost assets dramatically. Davis said the state argued that the structure was worth no more than about $3 million.

Times staff writer Mark Landsbaum contributed to this article.