Accused Embezzler Arrested on Passport Fraud Attempt in S.F.

The former owner of an Orange County savings and loan association, accused of illegally receiving at least $6 million from the insolvent institution, has been arrested and charged in San Francisco with applying for a passport in a dead man’s name.

John L. Molinaro, 46, former chairman of Ramona Savings & Loan Assn. of Orange, was planning to travel to Great Britain, according to his passport application.

FBI agents arrested Molinaro, formerly of Santa Ana, when he arrived at the downtown San Francisco passport office last Wednesday to pick up a passport in the name of John Anthony Cook, a long-deceased Northern California man, it turned out.

A U.S. State Department employee processing the application thought it was odd that the applicant, supposedly 32 years old, had a California driver’s license that had been issued only a month earlier. After further checking, the employee learned that the real Cook had died 30 years ago in Santa Clara County. He then alerted the U.S. attorney’s office, according to documents filed in San Francisco federal court.

“This all demonstrated that Molinaro was in the process of fleeing--probably with loot he had embezzled from the Southern California savings and loan association,” said Joseph P. Russoniello, the U.S. attorney for the Northern District.

Russoniello said Molinaro planned to spend three weeks in Great Britain before heading to the Caribbean, where it appeared he has money deposited in the Cayman Islands. Detailed information about the money was contained in Molinaro’s personal notes, Russoniello said.

Gregor Guy-Smith, Molinaro’s San Francisco attorney, did not return several phone calls from The Times.

The Federal Savings and Loan Insurance Corp., which along with state regulators seized control of Ramona last September, has asked the FBI in Los Angeles to begin a criminal investigation of Molinaro, Russoniello said.

Molinaro is being held without bail until a court appearance Wednesday. If convicted of making false statements on a passport application, he faces a maximum sentence of five years in prison and a $250,000 fine.

Shortly after seizing control of Ramona, the federal savings and loan agency filed a $35-million federal civil suit against Molinaro and several officers, accusing them of accepting illegal dividends, breaching their fiduciary duties and making false financial statements to the government. The lawsuit alleges that Molinaro received at least $6 million from various real estate deals and dividends. A trial is scheduled for early next year.

One transaction leading to Ramona’s insolvency involved a $2-million dividend that Molinaro paid himself in May, 1986. Molinaro, who earned about $30,000 a month, was Ramona’s sole owner, chairman and chief executive.

When Molinaro refused to return the $2 million in August, 1986, the state savings and loan commissioner filed suit against him. Earlier this year, a Los Angeles federal judge issued an injunction barring Molinaro from transferring or spending the $2 million.

Molinaro and construction executive Donald Mangano Sr. purchased Ramona for about $4 million in April, 1984. In May, 1985, Molinaro paid Mangano $4 million for his 50% share and became the sole owner.

The Federal Savings and Loan Insurance Corp. suit alleges that the two made improper loans that reduced Ramona’s net worth from $3 million to a negative $19 million in December, 1985. Ramona is operating under a management team appointed by the federal government.

The losses have continued to mount. Ramona posted a $10.3-million loss last year and lost $3.4 million in the first three months of this year, regulatory statistics show. At the end of March, Ramona’s net worth had plummeted to a negative $28.4 million.