Former Sun Savings & Loan Assn. President Daniel W. Dierdorff, who in July pleaded guilty to two felony charges, was no stranger to employees at the Dunes Hotel in Las Vegas, according to a highly unusual pre-sentencing report filed Friday in U. S. District Court in San Diego by Assistant U. S. Atty. Yesmin Saide.
According to the report, former Dunes Hotel President Morris Shenker--a one-time counsel to the Teamsters Union Western States Pension Fund--once told Dunes cage manager Ruben Cabanas to “take good care of (Dierdorff). He’s a good friend and he’s got lots of money.”
Cabanas evidently heeded Shenker’s advice: Cabanas subsequently testified that Dierdorff “received more favorable treatment than the (typical) $250,000 Dunes Hotel gambler,” according to the report.
Sun, which was seized by federal regulators in July, 1986, subsequently lost $200,000 on one “imprudent” $500,000 personal loan that Dierdorff negotiated for Shenker, according to the report.
Dierdorff, who will be sentenced later this year, enjoyed the special treatment even though it is unlikely that he ever amassed significant gambling winnings, according to the report.
$25,000 Line of Credit
But even Shenker eventually acknowledged that the perks, including a line of credit that swelled to $25,000 and five complimentary trips on the hotel’s private jet, were awarded because Dierdorff “was a banker, not because he was a big gambler,” according to the report.
Shenker arranged the unusual benefits “to discreetly divert money to (Dierdorff) to obtain favorable treatment” for loans that were seriously in default, according to the report.
In all, $13 million of the $120 million in losses reported by Sun before it failed were “traced to (Dierdorff’s) questionable loan and business transactions,” according to the report.
The report, which alleges many instances of misconduct, was filed “because this case didn’t go to trial and we wanted the judge to know about (Dierdorff’s) uncharged misconduct,” Saide said Friday.
The 65-page report, which is backed up by nearly 60 pages of exhibits, called for Dierdorff to be sentenced to the maximum 10 years in prison for the two felony charges of misusing Sun funds.
The former executive has “contributed to the demise of Sun S&L;,” according to the report. “His acceptance of kickbacks, bribes and personal gratuities for the approval of imprudent and high-risk loans, coupled with his outright theft of association funds, set in motion the chain of events that eventually led to the financial collapse of his institution.”
Dierdorff was not available for comment Friday.