Judge Says Spiegel Won’t Have to Put Up $21 Million : Thrifts: The ex-chief of Columbia Savings wins a round in his fight against charges that he squandered the firm’s assets.
A federal judge ruled late Friday that former Columbia Savings & Loan Chief Executive Thomas Spiegel does not have to place more than $21 million in escrow while awaiting a hearing on civil charges that he squandered the thrift’s assets.
U.S. District Judge Stephen V. Wilson in Los Angeles said laws governing thrifts do not permit regulators to make Spiegel post the money before his hearing. To allow that, Wilson said, would unconstitutionally deprive Spiegel of property without due process.
The federal Office of Thrift Supervision, which regulates savings and loans, alleged on July 5 that Spiegel spent nearly $19 million in Columbia funds on himself while chief executive of the now-insolvent Beverly Hills-based thrift. Spiegel, whose family still controls Columbia, resigned Dec. 31 as head of the thrift.
The charges, part of the largest civil case ever brought against an individual by thrift regulators, allege personal use of corporate jets, condominiums and concert tickets, as well as making loans to a friend who provided Spiegel with luxury cars. Regulators are seeking a $5-million fine.
The OTS wanted Spiegel to deposit into an escrow account the $19 million he allegedly squandered, plus an additional $2.3 million to cover potential losses on the sale of three condominiums Columbia now has on the market. They argued that Spiegel might seek to hide his assets.
An administrative hearing on the charges is scheduled for Sept. 4 in Los Angeles. Spiegel’s lawyers said the former executive will soon face additional charges. Although they did not say what the charges might be, investigators are known to have looked at such areas as Spiegel’s extensive security measures, costs associated with Columbia’s ornate new $55-million headquarters building, and use by Spiegel and his family of Columbia’s Hyatt Newporter resort in Newport Beach.
Dennis M. Perluss, one of Spiegel’s lawyers, said Wilson’s decision could prove significant because it narrows the young agency’s authority. Officials from the OTS, formed last year as the successor to the Federal Home Loan Bank Board, said they did not want to comment until they have read the decision.
The decision lifts temporary spending restrictions on transferring and selling assets that were placed on Spiegel and his wife, Helene. It also returns to Spiegel a $1-million bond that he posted.
