Levitts Will Pay $3 Million to Settle Suit

A former savings and loan president convicted of stealing $14.7 million from the thrift before it collapsed has agreed along with his wife to give the state $3 million in cash and property to settle a lawsuit.

The deal with former Old Court Savings & Loan Assn. President Jeffrey A. Levitt and his wife, Karol, was reached late Thursday. It was approved Friday morning by Circuit Judge H. H. Kaplan, who said the couple would be “left with little or nothing.”

A run on deposits in May, 1985, that caused the near-collapse of Maryland’s privately insured thrift industry began after reports of management problems at Old Court. Depositors had more than $800 million tied up in the thrift when former Gov. Harry Hughes froze withdrawals.

The state filed a $200-million lawsuit against the Levitts and 34 other Old Court defendants on behalf of depositors to recover some of the money they lost.

Under terms of the agreement, worked out in a year of negotiations, the Levitts will be required to give to the state an estimated $3 million worth of real estate, jewelry, cash and other property, including the family’s three homes.

“This agreement is going to put them so far out of that (wealthy) league that they’ll never be able to get near that again,” attorney Shale D. Stiller, representing the Maryland Deposit Insurance Fund, told Kaplan.

The settlement will cut the annual family income, which was $20 million to $30 million before the thrift got into trouble, to about $18,000, Stiller said, explaining that income represented the estimated interest on about $360,000 the family was allowed to keep.