Angry Band of Investors Refuses to Call It Quits : S&Ls;: About 350 senior citizens who call themselves the ‘victims of Keating’ organize to share information and follow the case. They want justice done and to recoup their losses.
Prosecutors and investigators aren’t the only adversaries Charles Keating, the former thrift executive charged in the multimillion-dollar Lincoln Savings & Loan collapse, will have to face the next time he goes to court.
Keating, who was released Thursday from Los Angeles County Jail after posting $300,000 bail, also can expect to see a busload of angry senior citizens from the San Fernando Valley, who say they have lost hundreds of thousands of dollars--in some cases their life savings.
The group consists of about 350 former investors, about 50 of whom attend monthly meetings at a senior center in Sherman Oaks. Their official name is the Lincoln ACC Bondholders Action Committee; their nickname is “Victims of Keating.” (ACC stands for American Continental Corp., Lincoln’s parent company.)
“They are a whirlwind group,” said Don West, chief investigator for Joseph Cotchett, the Burlingame lawyer representing 22,000 investors in a class-action suit pending against Keating and numerous colleagues.
Other than a similar organization in Orange County, West said the Valley committee is the only well-organized group of former holders of now-worthless American Continental Corp. bonds, which authorities allege Lincoln officials pushed on investors through misleading tactics. The seniors have banded together to share information, keep the case in the media, attend court hearings and do whatever else they can to see justice done and their money returned.
“We are still very angry,” said Jeri Mellon, 65, committee chairwoman, of Sherman Oaks. The former hospital administrator says she lost the $40,000 she invested in bonds in 1986 at the Lincoln branch at Riverside Drive and Woodman Avenue. She said she trusted officials there because the atmosphere was “like a family. I had been banking there since 1969. Everybody knew your name when you walked in the door.”
The “victims” group, which extends across economic lines, attempts to function as something of an extended family in helping each other cope, Mellon said.
“My heart goes out to some of these people; they lost everything,” she said.
A case in point, according to Mellon and West, is Israel Tepper.
The 69-year-old Tepper, a retired jewelry manufacturer, said he lost $265,000. After the 1989 Lincoln collapse cut off his interest checks, his income of about $3,000 a month was slashed to about $800 in Social Security, he said. He had to abandon his comfortable Van Nuys apartment and move in with friends in Simi Valley, he said.
It was hard for Tepper to watch Keating go free.
“That judge should be thrown out,” said Tepper, who also has harsh words for the elected officials and bureaucrats he accuses of abetting or ignoring the S&L; debacle.
“The senators were overlooking the situation,” he said. “Why didn’t the government tell us something was wrong and get the money out? Why are we giving money to other countries that we don’t have? This is the most bankrupt country in the world.”
The rest of the group shares a growing overall disgust with entrenched politicians, Mellon said, and plans to vote accordingly in November.
“We have to reduce the greed of our politicians,” she said. “They don’t care about us. All they care about is their power. We have to get them out.”
Mellon and the others still have hopes of getting some of their money back, pointing out that some defendants have settled civil suits against them and provided money to a plaintiffs’ fund. That money has not yet been distributed by the courts.
As for Keating, Mellon said she intends to rent a bus for a show of force at upcoming court dates. She can count on Sam Epstein, 78, of North Hollywood. Epstein was in his pajamas last month when he got a call asking that he attend Keating’s first bail hearing that same morning, but he still made it to court in time.
“I don’t like it,” Epstein said of the decision that allowed Keating to make bail. “I don’t think it’s right. Why doesn’t he divulge where some of the money is? I’ll bet some of that bail money is ours.”
