Silverado Client Denies Stashing $20 Million
Former Silverado Banking, Savings & Loan Assn. borrower Bill L. Walters denied accusations Friday during a federal hearing in Santa Ana that he deposited $20 million in a British offshore bank before filing for personal bankruptcy in November.
Walters, a former Denver developer who defaulted on about $100 million in loans from the failed Denver thrift, called the accusations by a Denver socialite “false.”
Virginia Dalton, a Federal Deposit Insurance Corp. attorney, asked Walters why socialite Elisabeth Dick had claimed during a divorce case last year that her husband, John, had helped arrange for Walters to deposit $20 million in a bank on the Isle of Jersey, a British island known as a tax haven for the wealthy.
“I wouldn’t pretend to know why she does anything,” Walters said.
Walters is a former business partner of President Bush’s son, Neil, a former Silverado director. Federal regulators have filed civil charges against Neil Bush, alleging that he violated conflict-of-interest regulations in the failure of Silverado. An administrative law judge ruled in December that Neil Bush had failed to properly disclose his business relationships with two large borrowers at Silverado while he served as a director, and recommended that he be restricted in any future roles with financial institutions.
Federal regulators have said that bad loans made to Walters contributed to the failure of Silverado, which is expected to cost taxpayers more than $1 billion.
For nearly two hours, Dalton asked Walters one question after another about his trips abroad, including two excursions to the British island to see John Dick.
“John Dick wanted me to see the manor house. He had just finished decorating it,” Walters said. “I just went over there to look around.”
Attorneys for Dick have denied his wife’s accusations, saying he never helped Walters with any of his banking.
Dick’s business dealings in the Isle of Jersey are part of a Resolution Trust Corp. investigation into the funneling of savings and loan accounts to offshore banks. Neither Walters nor Dick has been charged with any wrongdoing.
Friday’s hearing marked Walters’ first public comments about his personal finances since he told Congress in June that he was destitute. A month later, it was disclosed that he was dividing his time between a $1.9-million Newport Beach estate, a $1-million desert retreat near Palm Springs and a $250,000 oceanfront mobile home in Laguna Beach.
Records indicate that all the properties are listed in the name of his wife, Jacqueline Walters.
Federal bankruptcy trustee R. Neil Rodgers has accused Walters in a lawsuit of hiding assets from creditors by transferring ownership of six automobiles and more than $6 million in real estate to his wife. But Walters said Friday that he transferred all his property and assets to her in a prenuptial agreement before their marriage in November, 1986.
Walters, who told Congress he was once worth $100 million, owes creditors $279 million.
Walters answered questions for nearly six hours on topics ranging from his foreign travel to the type of material from which his three golf bags are made.
He maintained that he is still broke.
“To the best of my knowledge, I have no household goods, supplies and furnishings,” Walters said. “All of those were given to my wife” in the prenuptial agreement, he said.
Walters testified that he has $200 cash, $500 in jewelry and about $1,000 worth of clothing, though he said he has 15 suits and a dozen pairs of shoes in his closet.
He said he recently turned over two Rolex watches to Rodgers, including one costing $6,500 that was a Christmas present from Walters’ wife a few years back. Walters said he started wearing a Timex watch after he went bankrupt but that it stopped working Thursday.
Walters said he transferred about $4.5 million in cash to Jacqueline over a little more than a year, beginning in January, 1987. He said this was done to comply with the prenuptial agreement.
Four country club memberships are listed among the couple’s assets. Walters said Friday that his wife paid $10,000 in annual dues two months ago to the exclusive Vintage Club in Indian Wells near Palm Springs, an action he called unfortunate.
And he and his wife spent Thanksgiving vacation in Hong Kong and attended the Macao Grand Prix on a trip he described as “business and pleasure.”
Walters now works for a Newport Beach real estate development firm, W.P. Development. He and his secretary are the only employees of the company, which pays him a management fee of $10,000 a month.
Walters revealed in his testimony that a company called ERG Group had paid W.P. Development for many months a management fee of $10,000 a month. ERG’s owners include trusts of which Jacqueline Walters and Bill Walters’ mother are beneficiaries.
W.P. Development’s sole owner is Walters’ friend William B. Pauls, a Denver real estate investor who was also a Silverado borrower. Walters testified Friday that he had accompanied Pauls to England on several occasions in the 1980s.
Walters said he decided to file bankruptcy in October when he returned to Denver to see his son and was repeatedly served with subpoenas by attorneys for his ex-wife and a business associate.
“I went to Denver to attend my son’s back-to-school father’s day and I was served with a subpoena by my ex-wife to garnish my wages,” Walters testified. He said he received another subpoena standing at an airline ticket counter.
“This was no way to go through life, getting served everywhere you go,” Walters said.
Rodgers and FDIC attorneys are looking into Walters’ tangled finances, which include some 155 entities and at least seven trusts.
“We have just barely scratched the surface,” said Rodgers’ attorney, Joel S. Miliband.
