U.S. Task Force Probing Texas Thrift Industry

More than 50 federal investigators have launched a probe into Texas’ troubled savings and loan industry that could last two to five years and dwarf previous probes into the thrift business, an FBI agent said Sunday.

Bobby R. Gillham, agent in charge of the Dallas FBI office, said investigators began Aug. 3 to probe cases of alleged fraud uncovered by agents of the Federal Home Loan Bank and other federal agencies.

The task force, armed with subpoenas from a federal grand jury, has sought permission to seize the financial records of at least 290 people, the Dallas Times Herald said in a copyright story Sunday.

The Times Herald said the failure of Texas thrifts eventually could cost the Federal Savings and Loan Insurance Corp. up to $3 billion.

“We have instituted a task force to investigate potential instances of fraud that have been referred to us by the Federal Home Loan Bank,” Gillham told United Press International Sunday. “Participating in the task force besides the FBI are agents from the Internal Revenue Service, auditors from the Federal Home Loan Bank and attorneys with the Department of Justice and the U.S. Attorney’s office.”

The probe was prompted by the failure of several large Texas thrifts, though Gillham would not say which savings and loans were under investigation. He said the task force is investigating allegations that fraudulent operations, not the poor economy or ill-advised lending, was to blame for the collapse of some Texas thrifts.

The Times Herald said the task force has subpoenaed the records of Donald Dixon, former owner of Vernon Savings and Loan Assn.; Thomas Gaubert, former owner of Independent American Savings Assn., and Jarrett Wood, former owner of Western Savings Assn. All three institutions were shut down by federal regulators.

“The investigation is just beginning and I can’t say how long it will go on, but it will be at least two to five years,” Gillham said Sunday. “There will be continuing grand jury investigations as we gather information on individuals. It will be continual.”

Gillham said the potential scope of the investigation “goes well beyond” the ongoing probe into Empire Savings and Loan, a Mesquite thrift that was closed in the mid-1980s.

Empire was shut down due to its losses in a condominium boom gone bust along Interstate 30 east of Dallas. Investigators said property values were artificially inflated by land flips, leading to 90 indictments and a $142 million loss for the FSLIC.

Texas’ thrift industry was largely to blame for the temporary insolvency of the FSLIC. President Reagan signed a bill last week calling for the $10.8 billion recapitalization of the federal agency.

M. Danny Wall, chairman of the Federal Home Loan Bank Board, told UPI on Friday that 41 of Texas’ 280 thrifts “have no prospects of survival.” Roy Green, outgoing president of the Federal Home Loan Bank of Dallas, predicted it will take five to seven years and up to $6 billion in FSLIC funds to bring the Texas thrift industry back to health.

Texas Gov. Bill Clements, however, prompted an uproar last week when he said the government would “go belly up on this problem” and be able to repay only 30 cents on the dollar to depositors in failed thrifts.