Keating Sued Over Failure to Bare Assets : Thrifts: The U.S. Office of Thrift Supervision is also seeking to force the former operator of failed Lincoln Savings & Loan of Irvine to pay restitution of $40.9 million.
The Justice Department filed a lawsuit Friday against Charles H. Keating Jr. in an effort to force the former operator of failed Lincoln Savings & Loan Assn. of Irvine to turn over an audited accounting of his assets.
The lawsuit, filed in U.S. District Court in Los Angeles, seeks to obtain court enforcement of an administrative order issued last week by the Office of Thrift Supervision for an accounting of Keating’s assets.
The OTS is also seeking to force Keating, chairman of Phoenix-based American Continental Corp., to pay restitution of $40.9 million that he allegedly obtained from Lincoln transactions. The thrift, which was seized by federal regulators in April, 1989, is expected to cost taxpayers about $2 billion.
The administrative claim, which came as a cease-and-desist order issued Aug. 9, requires Keating to reveal his finances within five days. Keating has repeatedly said that he is destitute.
The order also asked that Keating give the government advance notice of any transaction of more than $5,000.
In a statement, the Justice Department said discussions between Keating’s attorney and the government failed to produce an agreement on Keating’s compliance with the OTS order, prompting the lawsuit.
Stephen C. Neal, an attorney for Keating, said his client “has been willing and has communicated his willingness to make exhaustive financial disclosures.”
But Neal said Keating would not comply with an “ongoing monitoring of his day-to-day living expenses. We will not give them (OTS investigators) that kind of control.”
He said Keating will fight the latest lawsuit, though he said his client remains willing to comply with the portion of the cease-and-desist order that demands disclosure of assets.
A hearing on the lawsuit will be held Monday in Los Angeles before U.S. District Judge Stephen V. Wilson.
OTS spokesman Thomas P. Mason said the Justice Department, which is working with OTS on actions against corporate officers involved in thrift failures, wants Wilson to issue an immediate restraining order forcing Keating to comply with the OTC cease-and-desist order.
The claim for restitution will be heard by an administrative law judge in October.
If the Justice Department restraining order is granted, Keating’s continued refusal to turn over an audited accounting of his wealth and give the OTS 48-hour advanced notice of transactions of more than $5,000 could lead to contempt charges.
