Molinaro Won’t Be Free on Bail in Bank Fraud Case

John L. Molinaro, former head of the defunct Ramona Savings & Loan who was indicted last month for fraud, was ordered held without bail Monday after prosecutors argued that he may flee the country when he completes his sentence for passport fraud.

U.S. District Judge David V. Kenyon issued the order based on federal law allowing detention when “no conditions or combination of conditions will reasonably assure” the defendant’s appearance at trial.

Assistant U.S. Atty. Harriet B. Leva said she was pleased with Kenyon’s decision.

Molinaro’s lawyer, Chester Brown, has said he will attempt to get Molinaro’s two-year prison sentence for passport fraud reduced and win his release, possibly within four months. Molinaro has been in federal custody for almost one year, most recently at Terminal Island.

Targets of Lawsuit

Molinaro now faces trial Sept. 13 on 36 counts of bank fraud, conspiracy to defraud, filing false documents and doctoring books at the Orange-based thrift. If convicted, he could be sentenced to 180 years in prison and fined $9 million.

Molinaro’s co-defendant in the criminal fraud case, Donald P. Mangano Sr., was ordered last week to post $150,000 security or surrender by next Monday.

Both men are also targets of a lawsuit filed by federal regulators who took over Ramona, claiming that mismanagement and fraud had cost investors $40 million. Trial in that case was recently delayed until next January to allow the criminal proceedings to take place first.

In a hearing before Judge Kenyon last week, Leva argued that Molinaro posed a flight risk because he had planned once before to flee the country.

Prepared to Disappear

Leva said Molinaro stashed $3 million in a bank in the Cayman Islands and had carefully prepared to disappear along with a companion. Molinaro had obtained two sets of identity cards, one in his own name and one in a false name, including credit cards and library cards.

He was arrested in San Francisco when he tried to apply for a passport in the fake name last July. At the time, he had $400,000 in cash and jewelry and a loaded pistol, Leva said.

“He was going to go to the Cayman Islands and enjoy the millions he had secreted there,” Leva told Kenyon.

Molinaro has insisted he did not intend to flee but was going to the Caribbean to tap his remaining source of funds to fight the civil lawsuit.