U.S. Plans to Seize Assets in S&L; Frauds : Bailout: Soaring costs prompt a move to “prevent assets from being dissipated” before convictions.

The Justice Department announced today that the government plans to freeze and seize assets in cases involving alleged savings and loan fraud.

The announcement came a day after the Bush Administration acknowledged that its $50-billion savings and loan bailout will not be enough. A congressional report has said costs could be as high as $500 billion.

A major problem with S&L; investigations, Justice spokesman David Runkel said, is that “the assets are not there following the convictions.” The new effort will try to “prevent assets from being dissipated,” he said.

In Dallas, a federal bank fraud task force has brought charges against 62 people, of whom 49 have been convicted, the department said.

The government has recovered about $12.5 million while the taxpayers have spent “hundreds of millions of dollars” to cover the costs of the illegal actions, Runkel said.

The assets to be targeted could be either those of the S&Ls; or of the individuals involved, and the actions would be “prejudgment attachments,” he said.

The authority to freeze and seize the assets was part of the S&L; bailout package approved by Congress last year.

“It’s a device to freeze assets that are derived from savings and loan wrongdoing,” Runkel said.

Atty. Gen. Dick Thornburgh met today with Timothy Ryan, who was sworn in Monday to a five-year term as director of the Treasury Department’s Office of Thrift Supervision. As a result of the meeting, Thornburgh directed his staff and U.S. attorneys to meet with Ryan’s people to coordinate efforts.

“I want to send a message to the public: We will not tolerate the fraudulent practices and decisions in the industry that in the past have led to so many failures and put such a financial burden on the American taxpayer,” Ryan told top officials at his agency.

“There’s no question that the cost is increasing and we’ll have to take that into account in deciding future actions,” White House spokesman Marlin Fitzwater said Monday.

Fitzwater was responding to a report by the General Accounting Office, an investigative arm of Congress, that the cost of the President’s bailout program would be $325 billion instead of the $257 billion estimated five months earlier.