McKinzie, Others Plead Not Guilty of Looting S

A former executive consultant at the failed North America Savings and Loan and four associates pleaded not guilty Monday to racketeering and other charges in what federal prosecutors have called the worst case of insider fraud in the history of the state’s thrift industry.

Janet Faye McKinzie and the co-defendants were ordered to appear before U.S. District Court Judge Alicemarie H. Stotler on June 6 to begin trial. The arraignment of a sixth defendant was postponed until next week because he had not retained a lawyer.

McKinzie, 39, said little at her morning arraignment and refused to answer any questions as she was ushered out of the federal courthouse by an entourage of friends and family members. With her own assets of $12 million frozen by federal officials, McKinzie posted $50,000 bond last week after a friend put up her Newport Beach home as collateral.

Her lawyers maintained a similar silence in the face of questions surrounding a woman who prosecutors say worked with North America’s late founder, Duayne D. Christensen, to loot the Santa Ana institution of $16 million.

Christensen, a former Westminster dentist, is an unindicted co-conspirator in the case. He was killed in a car crash in January, 1987, just hours before state regulators seized control of his insolvent institution. Christensen named McKinzie, his confidante and executive assistant, the sole beneficiary of his $10-million life insurance policy.

North America was founded in 1983 and was closed last June. The federal government paid $120 million to bail out insured depositors.

In a 40-count indictment handed down last week by a federal grand jury in Los Angeles, McKinzie and the five co-defendants stand accused of having diverted North America’s federally insured deposits for their personal gain.

The defendants are the first on the West Coast charged under powerful anti-racketeering laws in connection with a savings and loan failure.

Besides McKinzie, also pleading innocent to racketeering, fraud and conspiracy charges Monday were Victoria R. Walker, 46, office manager of an Elk Grove real estate firm owned by McKinzie; David L. Morgan, 52, of Little Rock, Ark., accused of acting as a prospective buyer for allegedly phony escrow properties, and Frederick Youngdahl, 53, of Newport Beach and Thomas C. Clark, 63, of Vista, both contractors who allegedly participated in a phony invoices scheme.

A sixth defendant, Armando J. Vasquez, 52, of Irvine, did not enter a plea Monday because he did not have a private lawyer. He was denied a request for a court-appointed counsel. Court records show he claims an annual salary of about $62,400 and assets of more than $300,000.