3 Former Officers of Failed Maryland S&L; Fined $100 Million Each for Fraud

A jury on Tuesday fined three former directors of First Maryland Savings & Loan $100 million each for mismanagement and fraud that helped cause the thrift’s collapse in 1985.

The award plus additional amounts bringing the total to $387 million culminated a 4 1/2-month civil trial in Montgomery County Circuit Court, and lawyers called the award the largest ever in Maryland. Of the award, $322 million was in punitive damages against the three directors and other defendants, and $65 million was partial compensation to the depositors who lost money when the institution collapsed.

When it folded, First Maryland had 22,000 depositors, and the state estimates that 7,000 accounts are still owed $100 million by it.

The state has similar lawsuits pending against other thrifts. The Maryland Deposit Insurance Fund, the state agency that filed the lawsuits, alleged that deliberate mismanagement left the institutions ripe for collapse when depositors lost confidence in the industry in spring, 1985.

The officers of First Maryland, based in Silver Spring, were accused of using their depositors’ money for their own gain and enrichment of their friends. In addition to the officers, there were other defendants who had connections with the institution.

Former First Maryland President Julian M. Seidel, of Potomac, Executive Vice President James R. Porter of Falls Church, Va., and director and outside counsel Edward A. Dacy of Rockville were fined $100 million each for civil conspiracy.