Failed S&L;’s President Gets 8-Year Prison Term, Fine

Daniel W. Dierdorff, who last July pleaded guilty to two counts of fraud in connection with the July, 1986, demise of Sun Savings & Loan of San Diego, was sentenced Monday to eight years in federal prison and ordered to pay $202,624 in restitution and a $10,000 fine by U.S. District Judge John S. Rhoades.

The government charged that Dierdorff’s “questionable loan and business transactions” as president of the institution were directly responsible for $13 million of the $120 million in losses that Sun Savings accumulated before regulators closed the failed thrift in July, 1986. Dierdorff last July pleaded guilty to illegally transferring $200,000 in S&L; funds to a secret account and to forging a signature on a $2,000 check.

Defense attorney Peter Hughes argued for leniency and said the government’s request for a stiff sentence as a deterrence was “a fallacious argument.” Assistant U.S. Atty. Yesmin Saide had asked Rhoades to sentence Dierdorff to the maximum 10 years in prison as a deterrent to white-collar crime in the nation’s savings and loan industry.

Saide called Dierdorff a “greedy, ruthless, power-hungry man driven to fatten his own wallet” by making illegal loans to people who eventually defaulted, skimming S&L; funds and taking thousands of dollars in kickbacks from risky loans that he approved.

In arguing for leniency, Hughes said he expected Rhoades to impose a jail sentence. But, Hughes argued, the judge should keep in mind Dierdorff’s age and the fact that “he’s flat broke.”

Dierdorff, 53, read from a short prepared statement and broke down in tears when he said he never intended to “hurt anybody, including Sun Savings.”

Rhoades noted the contradictions in Dierdorff’s life--misuse of customers’ and stockholders’ funds on one hand while he was active in social and community groups--before imposing sentence. The Federal Savings and Loan Insurance Corp. last week announced a negotiated settlement in a civil suit against Dierdorff and his wife, Mary.

In addition to the federal government’s criminal and civil suits, Sun’s failure generated several civil suits that disgruntled shareholders filed against Sun’s board, its attorneys and accountants.

Dierdorff’s prison sentence came despite the testimonials that friends and former business associates of Dierdorff forwarded to Rhoades. About 60 San Diegans--including San Diego City Manager John Lockwood, former San Diego Charger Kellen Winslow and state Sen. Larry Stirling--sent letters that lauded Dierdorff’s past roles in various San Diego athletic and civic organizations or that echoed Dierdorff’s plea that he be sentenced to community service in lieu of prison.

In recent weeks--perhaps driven by the federal government’s attempt to fix the troubled thrift industry--most of the letters that accumulated in Dierdorff’s court file in the federal courthouse urged that Dierdorff be sentenced to prison.

“Very few people responsible for the failures ever see the light of justice,” wrote Rod Tompkins, a top executive of San Diego-based Great American First Savings Bank. The courts must look through the smoke screen of testimonials, Tompkins said.

Similarly, William J. Crawford, California Department of Savings & Loan commissioner, recently wrote that “white-collar criminals do have many redeeming personal characteristics--otherwise they would not be able to ply their trade. (Dierdorff’s) activities at Sun Savings warrant stiff justice.”