Stiff Sentences, Fines Urged in S&L; Failure
The nation’s top bank regulator has joined the U.S. attorney’s office in Los Angeles in recommending long prison sentences and payment of millions of dollars in restitution and fines for two Orange County men convicted of causing the collapse of a Santa Ana savings and loan.
The U.S. attorney’s office has recommended that John L. Molinaro and Donald P. Mangano Sr.--former owners of Ramona S&L--receive; 55 years in prison between them and pay a total $15 million in fines and restitution.
Federal Deposit Insurance Corp. Chairman L. William Seidman appealed in a letter to U.S. District Court Judge David V. Kenyon to give both men a stiff sentence.
“I am particularly concerned that the sentences imposed upon Mr. Molinaro and Mr. Mangano reflect the seriousness of their crimes and serve to deter others from committing similar acts,” wrote Seidman, who oversees failed thrifts as a member of the Resolution Trust Corp.
In a sentencing memo submitted earlier this week, federal prosecutors said Ramona’s collapse “typifies the unbridled greed and insider corruption that has so catastrophically harmed the savings and loan industry.”
Molinaro and Mangano were both convicted in October on more than 30 counts of bank fraud and conspiracy and are scheduled to be sentenced by Judge Kenyon on Feb. 5.
Ramona was taken over by regulators in 1986 and subsequently required a $65.5-million bailout.
The Office of Thrift Supervision also sent a letter to Kenyon calling the Ramona case “one of the most egregious examples of insider abuse that have plagued the thrift industry during the past few years.”
Assistant U.S. Atty. Steven E. Zipperstein has asked Kenyon to fine Mangano $1.5 million, order him to pay $6.8 million in restitution to the FDIC and give him a 30-year prison term.
“From the moment he and Molinaro took over Ramona, Mangano’s sole interest was to steal as much of Ramona’s money and property as he could,” Zipperstein said in a memo.
Michael E. White--Mangano’s attorney--said he was shocked by the prosecution’s request.
“I think the recommendations are outrageous; they’re excessive,” said White. “They are using Mangano as a scapegoat for the woes of the entire S&L; industry.”
Prosecutors have recommended that Molinaro receive 25 years in prison and pay $7.8 million in fines and restitution. His attorney was unavailable for comment.
Mangano, 53, of Huntington Beach, and Molinaro, 48, of San Jose, were found guilty of carrying out a complicated real estate scheme using Ramona’s funds that was designed to enrich them personally. Prosecutors alleged in the sentencing memo that Mangano stole $11 million from the thrift and Molinaro more than $10 million.
“In effect they pulled off an enormous heist of their own bank,” Zipperstein said. “This case has once again demonstrated that a person with a briefcase can harm society much more than can a person with a gun.”
The Ramona case was the first criminal trial of owners of a failed savings and loan in Southern California.
