Orange County Man Charged With Fraud : Thrifts: The mortgage broker allegedly had a scheme that led to the collapse of Signal Savings & Loan. His attorney says he will plead guilty.

A Huntington Beach mortgage broker was charged on Friday with defrauding Signal Savings & Loan in a multimillion-dollar scheme that regulators claim caused the thrift’s collapse in 1989.

Robert Herrera, owner of United Security Mortgage Co., was charged in U.S. District Court in Los Angeles with three felony counts of wire fraud and making false statements for allegedly using mortgages he didn’t own as collateral to secure a large line of credit from Signal.

The investigation of the now-defunct Signal Hill-based thrift is one of several so-called priority cases in Southern California earmarked by the Justice Department for expeditious prosecutions.

“This fraud was what brought the institution to its knees,” said William D. Davis, commissioner of the state Department of Savings and Loan.

Signal, which opened in 1983 and had only one branch, had $46.1 million in assets when it became insolvent in 1988. The thrift was liquidated in early 1989. Federal officials said they did not know how much Signal’s collapse has cost taxpayers.

Terry Bird, Herrera’s attorney, said his client would plead guilty to the charges later this month as part of an agreement with the U.S. Attorney’s Office. If convicted, Herrera, 47, could receive as much as nine years in jail, according to Chief Assistant U.S. Atty. Terree A. Bowers.

Through Huntington Beach-based United Security, Herrera purchased mortgages and then repackaged them and sold them to financial institutions. Bowers said Herrera used some of those mortgages to get loan money even though he and his company didn’t own them.

For instance, Herrera allegedly supplied Signal with a receipt for a $74,684 mortgage even though it had already been sold to Altus Bank in Mobile, Ala. Another time, he supposedly provided a receipt for a $70,687 mortgage even though it was being sold at the time to Citicorp Mortgage in Missouri.

Federal investigators said they were still determining the precise dollar value of the fraud, although Davis said it was about $5 million.

“Much of the money was going back into United Security,” said Bowers.

Bird refused to comment on how much money his client obtained from Signal but said he wasn’t living lavishly. “This isn’t a situation where someone stuck money in their pocket,” he said. “It’s not quite that simple.”