20-Year Prison Term, Fine Urged for McKinzie : Crime: The actions of the woman convicted of looting North America S&L; ‘are among the most egregious this regulatory agency has encountered,’ said T. Timothy Ryan of the Office of Thrift Supervision.
Janet Faye McKinzie--convicted last March of looting the now-defunct North America Savings & Loan in Santa Ana--would receive a 20-year prison sentence and be forced to pay more than $18 million in restitution and fines if the federal government gets its way.
On Friday, Assistant U.S. Atty. Paul L. Seave filed the federal government’s sentencing recommendation for McKinzie, who was found guilty of 22 counts of racketeering, conspiracy, bank fraud, wire fraud and interstate transportation of stolen property.
North America’s 1987 collapse has cost taxpayers $118 million.
Besides the prison term, Seave asked U.S. District Court Judge Alicemarie H. Stotler to order the former thrift consultant to pay $13.5 million in restitution and $5 million in fines.
“McKinzie not only stole from NASL with abandon, but also shamelessly lied and created volumes of phony documentation to deceive the banking regulators,” Seave said in the filing. “The pervasive nature of the fraud and deception make this case one of the largest savings and loan debacles of its time.”
McKinzie’s attorneys did not return several phone calls on Friday.
The North America case generated a great deal of attention, largely because of McKinzie’s lavish lifestyle. She drove a Rolls-Royce, hired the late Sammy Davis Jr. to entertain at her 37th birthday party, and spent hundreds of thousands of dollars at Neiman-Marcus, much of it after regular store hours as a preferred customer.
Several of the nation’s top regulators sent Stotler letters blasting McKinzie’s spending habits.
“Although hundreds of savings institutions across the country have failed because of fraud, it is apparent that Janet McKinzie’s fraudulent actions are among the most egregious this regulatory agency has encountered,” said T. Timothy Ryan, director of the Office of Thrift Supervision. “Ms. McKinzie diverted federally insured deposits for her personal use and then flaunted her ‘new-found wealth.’ ”
State officials echoed the statements of federal regulators in their pre-sentencing correspondence with Stotler.
“As the conservator for North America Savings & Loan Assn., I observed the greatest fraud of my career,” said William D. Davis, who is acting commissioner of the state Department of Savings and Loan.
McKinzie had pleaded not guilty by reason of insanity, claiming she was duped into carrying out the fraud because she was being pumped full of prescription drugs by the thrift’s chairman, Duayne Christensen.
Seave has asked Stotler to incarcerate McKinzie immediately after her sentencing July 20.
“In light of defendant’s psychiatric history and the concerns raised at the time the jury returned its verdict, the government also has concerns that defendant poses a threat to her own safety,” Seave said in his filing.
McKinzie, 40, was the beneficiary of a $10-million life insurance policy held by Christensen, who died in a car crash just nine hours before regulators seized North America.
The proceeds of Christensen’s life insurance, plus some of McKinzie’s savings totaling $12.9 million, are in court-supervised escrow accounts pending Stotler’s ruling. The escrow accounts are generating monthly interest of at least $72,000.
