Newport Beach Couple Sentenced for S&L; Swindle

A Newport Beach couple who fraudulently obtained $13 million in loans from a California thrift was sentenced to prison Friday for a swindle that the prosecutor said illustrates the roots of the nation’s savings and loan trouble.

Robert A. Buceta, 41, was sentenced to five years in federal prison, and his wife, Patricia L. Thibault, 43, received an 18-month term. U.S. District Judge Richard A. Gadbois Jr. said he gave Thibault a “distinctly lenient” sentence because the couple’s 6-year-old daughter needs care.

Defense attorneys blamed the bad loans on the negligence of the financial institutions in failing to adequately investigate or underwrite the transactions. Gadbois gave a nod to that argument, but said the couple still must be punished.

“It’s abundantly apparent to me that the ultimate lenders and their agents didn’t do anything resembling what their job was, and they were greedy,” Gadbois said. “That, however, does not excuse the basic thrust of the counts of conviction. It puts a nice amber light on it, but it doesn’t excuse it.”

In August, the couple pleaded guilty to making false statements to obtain loans from State Savings & Loan of Stockton, which is now American Bank. The pleas reflected only a few of the original 22 counts filed against them in March, 1988, which charged them with lying to obtain more than 1,000 loans worth $76 million between 1982 and 1984 with little or no collateral.

Prosecutors said they rigged a complex scheme to use double escrows to buy apartment buildings, purportedly intending to convert them to condominiums. But little work was done, and the loans went into default.

Buceta and Thibault, or one of their partnerships, would buy an apartment building and immediately resell the units of the building to each other or to another of their entities at a much higher price, court documents said. Then they obtained loans based on the second, higher price, secured only by the building itself. The loan amount covered the sale price and left extra money for Buceta and Thibault, prosecutors said.

Neil Papiano, one of Thibault’s lawyers, said the couple’s actions have to be seen in the context of the environment of the thrift industry at the time.

“This was a time the savings and loan industry was in its freewheeling phase and it was virtually begging parties to come in for loans because . . . it made their books look good,” Papiano said.

Assistant U.S. Atty. Carolyn J. Kubota admitted that the thrifts might have been “sloppy,” but said Buceta and Thibault still wreaked havoc on the institutions.

“It’s exactly this type of activity that the savings and loan debacle is made out of,” she said.

Court documents said three thrifts that bought the couple’s loans from mortgage brokers went into receivership, due partly to losses on those loans. Kubota said State Savings & Loan of Salt Lake City lost $23 million, State Savings & Loan of Stockton lost $10 million and Sun Savings of San Diego lost $7.3 million. Another thrift, Empire Savings & Loan, lost $3.3 million.

Buceta and Thibault have agreed to pay $400,000 to settle a related civil suit filed by the Federal Savings and Loan Insurance Corp. to recover for loans made by State Savings of Utah, Kubota said.