Ex-Sun Savings Chief Dierdorff May Go to Prison, U. S. Judge Says
There is a “distinct possibility” that former Sun Savings & Loan President Daniel W. Dierdorff will be sentenced to prison for fraudulent activities that occurred before Sun Savings’ highly publicized failure in July, 1986, U. S. District Judge John Rhoades said at a pre-sentencing hearing Thursday.
Dierdorff, who in June pleaded guilty to two felony fraud counts for misusing Sun funds, is scheduled to appear before Rhoades on Monday for sentencing. The 53-year-old former S&L; executive pleaded guilty to keeping a secret $200,000 account and forging a $2,000 check.
Assistant U. S. Atty. Yesmin Saide has asked that Dierdorff be sentenced to the maximum 10 years in prison for the two offenses. Dierdorff has asked for a sentence that includes community service in San Diego.
Civil Suit Settled
In a related development on Thursday, the Federal Savings & Loan Insurance Corp., which insured customer deposits at Sun, settled a civil suit lodged earlier against Dierdorff and his wife, Mary. The settlement, which will be made public on Monday, drops civil charges against the Dierdorffs but includes a stipulated monetary judgment, according to George Foster, a San Diego-based attorney who represented FSLIC in the civil action.
At Tuesday’s lengthy hearing, Rhoades said the government failed to prove its allegation that Dierdorff caused Sun Savings to collapse. Rhoades also said the government failed to prove its allegation that Dierdorff’s “questionable loan and business transactions” were directly responsible for $13 million of the $120 million in losses that Sun Savings accumulated before failing.
“Whether Sun Savings went under because of Dan Dierdorff is impossible to say,” Rhoades said. “But there’s no doubt that what Mr. Dierdorff did did not help.”
Waiting for History
Rhoades suggested that the “many, many civil suits that are involved in this case” might eventually determine where to place the blame for Sun’s failure. Disgruntled Sun shareholders have filed several suits against Sun’s board of directors and officers, as well as its accountants and lawyers.
Rhoades predicted that the spate of suits will keep lawyers elsewhere busy “for the next five years.” Rhodes also suggested that the final verdict on Dierdorff’s role in Sun’s collapse might not occur until “the history professors write the books” about the nation’s epidemic of failed savings and loans.
Rhoades used the pre-sentencing hearing to sift through the stacks of documents that the government assembled to outline its fraud case against Dierdorff. Rhoades tossed out information that was “unreliable information as designated by law” or that simply had no bearing on Dierdorff’s sentencing.
