Ex-Owners of Ramona S&L; to Settle Suit

The first owners of a failed thrift in Southern California to be convicted of bank fraud have tentatively agreed, along with several others, to surrender $5.9 million in assets to settle a civil lawsuit brought by the Federal Deposit Insurance Corp., it was learned Friday.

The FDIC filed a $30-million lawsuit against former Ramona Savings & Loan owners Donald P. Mangano Sr. and John L. Molinaro to try to recoup money lost after the 1986 collapse of the Orange-based thrift. The federal agency is dropping its action in exchange for the settlements.

Mangano is being stripped of nearly every asset he owns, including $1.2 million in cash and real estate, according to FDIC attorney Richard Fruin. The settlement says that Mangano, who is a quadriplegic, will be left with only his wheelchair-equipped van.

“We regard this as a very favorable resolution to the FDIC,” Fruin said. “We’re trying to demonstrate crime does not pay.”

Mangano and Molinaro were convicted last October on more than 30 counts of bank fraud and conspiracy. The thrift’s failure has cost taxpayers $65 million.

Some $2.5 million of Molinaro’s assets were previously levied by the FDIC but the settlement--which is subject to approval by an FDIC review committee--calls for an additional $500,000 worth of Santa Clara Valley property to be liquidated.

Molinaro, 49, of San Jose is serving a 12-year sentence at the U.S. Federal Correctional Institution at Terminal Island. Mangano, 53, of Huntington Beach has yet to begin serving a 15-year sentence.

“The two owners of Ramona Savings & Loan were essentially left with nothing,” Fruin said.

Mangano’s wife, Mary, was allowed to keep the couple’s Huntington Beach condominium, $18,000 in cash, furniture and some jewelry, Fruin said.

Molinaro’s first wife, Sharon, will give up $325,000 in cash. The former couple’s children will relinquish $375,000 placed in a trust fund for them. Kimberleigh Ferm, another former wife of Molinaro, is surrendering about $450,000 in cash and $200,000 in equity in her San Jose home, according to Fruin.

Each defendant in the case will be subject to audits by an accountant hired by FDIC for the next five years, Fruin said.

On Monday, U.S. District Judge Alicemarie H. Stotler is scheduled to review the Mangano agreement and is expected to set a date for settling remaining matters in the case.

The Mangano settlement already has been approved by the FDIC review committee, Fruin said. The remaining defendants didn’t settle until late Thursday so their agreements are still tentative.

Mangano and Molinaro bought Ramona in 1984 for $4 million and gained control of the thrift’s assets, valued at $55 million. The two men then proceeded to engage in a series of complex real estate transactions that were designed to enrich them.