U.S. Judge, Target of Probe, Files New Report on Finances

As the U.S. Justice Department nears a decision on whether to indict him, a federal judge filed a new financial disclosure report on Tuesday suggesting that he had previously misreported a controversial loan.

U.S. District Judge Robert P. Aguilar reported in his latest disclosure that he received a $12,000 loan from Ronald V. Cloud, a former Nevada casino owner, not $10,000 as he reported last year.

Aguilar, 58, continued to report that the unsecured loan is due upon his death and payable by his estate. He has reported that the interest on the loan is to be “whatever” Cloud, 70, or his heirs “would chose to charge not to exceed the prevailing rate as of December, 1987.”

Sources have told The Times that federal investigators have been looking into the San Jose judge’s affairs since at least September, and a grand jury has met in San Francisco to hear evidence resulting from the investigation.

Sources close to the investigation said Aguilar may be charged with violating the Racketeer Influenced and Corrupt Organizations Act for a series of actions since he was appointed to the bench in 1980 by former President Jimmy Carter. Part of the investigation reportedly focuses on the loan from Cloud, but federal sources declined to confirm details of the investigation.

Aguilar would be the first sitting judge to be charged under the racketeering statute. The Justice Department’s Public Integrity Section is in charge of the investigation.

Aguilar disclosed the new loan amount without explanation, stating simply that the loan was for $12,000, “evidenced by $10,000 promissory note plus $2,000 not included in the note.”

John L. Williams, Aguilar’s lawyer, said he does not “think there’s any significance” to the change from $10,000 to $12,000. Williams declined further comment on why the misreporting occured or what prompted the corrected disclosure. While the amount is relatively small, Aguilar has made a point in the past of stating that the loan was for $10,000.

In a letter to the Judicial Ethics Committee dated July 18, 1988, Aguilar explained in some detail why he did not report what he then called a $10,000 loan on his 1988 disclosure form.

He said that according to his reading of the instructions for filling out the disclosure form, he did not need to list the loan because the amount was not “more than $10,000.”

“Since this note obligation did not exceed $10,000 on its face, I did not list it,” Aguilar wrote, noting that he “inadvertently, unintentionally and without intent to not report” misread a portion of the instructions requiring that he list the debt.

Aguilar wrote the letter after he had failed to list the loan on the disclosure form he filed last May, covering the year 1987.

Federal judges must file economic interest disclosures each year. The form states that individuals who knowingly file false statements could face civil or criminal sanctions.

Aguilar first listed the loan on the disclosure filed in 1987 for economic interests in 1986. At that time, he reported that the loan amount was in the $10,000-to-$15,000 range.

The San Jose Mercury quoted him last year as saying that he received the loan in 1983. It is not clear why he failed to report it until 1987 and he has declined to comment on the investigation.

Aguilar is one of three full-time federal judges in San Jose, and has handled several high-profile cases. He received the appointment in 1980, after serving for a year as a state judge in San Jose. Before he became a judge, Aguilar had practiced law in San Jose, and had represented Cloud, a Fresno businessman.

Cloud, 70, ran the Cal Neva Lodge in Crystal Bay, Nev., until October, 1983, when the Nevada Gaming Commission directed that his license be allowed to lapse because of alleged irregularities at the casino.

In 1987, Cloud was convicted of conspiring to defraud a bank in the 1985 sale of the casino. U.S. District Judge Samuel Conti of San Francisco ordered that he pay a fine and restitution totaling $8 million. Hibernia Bank, which financed the sale, claimed losses of more than $24 million.

Federal judges are appointed for life, though they can be impeached. The public integrity unit, which is responsible for looking into misconduct by federal judges, has led investigations resulting in the indictments of three sitting federal judges in the 1980s.

Harry Claiborne of Nevada was convicted of tax evasion in 1984 and impeached in 1986. Judge Walter L. Nixon of Mississippi was convicted of perjury in 1986, and faces impeachment. Judge Alcee Hastings was acquitted of conspiring to accept a bribe in 1983, although he faces possible impeachment.

Dan Morain reported from San Francisco and Ronald J. Ostrow from Washington.