U.S. Indicts 9 in Consolidated Thrift Probe

One of the FBI’s priority S&L; investigations came to a head Thursday when a federal grand jury here indicted the former owner of Consolidated Savings Bank in Irvine and eight associates for allegedly defrauding the now-defunct thrift of $13.5 million.

The indictment is the result of a five-year investigation that targeted Robert A. Ferrante, a Newport Beach developer who has done business with convicted criminals and associates of alleged mobsters, and who once survived an assassination attempt.

Ferrante, 41, was charged with 17 offenses, including wire and mail fraud for allegedly making insider loans to family and friends and to faltering companies and development projects in which he had an interest.

“As the sole owner of a significant savings and loan establishment, Ferrante’s paramount responsibility was to his depositors--not himself,” said U.S. Atty. Gen. Dick Thornburgh in announcing the indictments. “Today, his loans and lies have finally self-destructed.”

The indictment is the result of a lengthy probe of Consolidated’s failure. The collapse, one of the first in Orange County in the mid-1980s, is estimated to have cost taxpayers about $30 million.

Besides Ferrante, four more Consolidated insiders were indicted Thursday, including former chairman, chief executive and president Ottavio A. Angotti, 54, of La Habra. Each could receive up to 85 years in prison and be fined more than $4 million.

Brian Lysaght, Ferrante’s attorney, said his client will plead not guilty when he is arraigned Tuesday.

“This, in our judgment, is a political indictment that was filed in order to create a scapegoat for the S&L; crisis,” Lysaght said. “This is a bank that is probably the most successful receivership in FSLIC history.”

Consolidated was founded by Ferrante in 1984 with just $2 million, but within two years grew to about $84 million in assets. Consolidated officials frequently found themselves at odds with regulators, who feared the thrift was making risky investments.

Regulators declared the institution insolvent in May, 1986, saying it “had substantially dissipated its assets and earnings” by making improper insider loans. Regulators filed a civil suit against Ferrante and other Consolidated officers in an effort to recoup the losses.

But Ferrante fought back. He sued the federal regulators for $600 million, saying they had improperly seized the institution. The civil suits have since been settled, but most of the terms have not been made public.

Ferrante is accused in the indictment of using third parties to funnel about $13.5 million to companies in which he had an interest through two different transactions.

The first deal involved a Texas real estate partnership named Forest Ridge, which was formed to buy and develop about 400 acres of land in Austin, Tex. Prosecutors claim Ferrante caused Consolidated to loan a third party--CB Financial Corp., owned by Charles J. Bazarian--about $9.5 million. CB Financial loaned most of that money to Forest Ridge, according to the indictment.

Federal banking laws restrict loans to insiders and limit the amount of money a thrift can lend to one borrower. Prosecutors claim the Forest Ridge transaction violated both of those provisions.

Bazarian, who was convicted of bank fraud in Florida several years ago, pleaded guilty to defrauding Consolidated and another thrift in 1989. He was sentenced to four years in prison and is thought to be cooperating in the Consolidated investigation.

The second deal was a purported $1.6-million loan to Pyrotronics Corp, a now-defunct Anaheim fireworks firm that Ferrante controlled. The indictment alleges the loan was laundered through the thrift’s friends and business associates before making its way to Pyrotronics.

Pyrotronics was owned by W. Patrick Moriarty, sentenced to seven years in prison for political corruption. He was released after serving 29 months.

By some accounts, Ferrante had business dealings with associates of the mob. Bazarian, for instance, was involved in a Florida bank with a suspected mob associate. Ferrante denies any mob connections.

“The bank was shut down because of these same sort of groundless claims, namely that Ferrante and Angotti for a variety of things--including their last names--were involved in organized crime and there isn’t the slightest evidence of that,” Lysaght said.

There is evidence, however, that Ferrante has lived dangerously. Carol Ferrante, his wife at the time, once testified in a Superior Court proceeding that Ferrante took “extreme risks with money, even to the point of nearly being murdered because of its use.”

Nine years ago, a gunman tried to kill him outside his home in Torrance, filling his body with six .22-caliber bullets. Police said Ferrante offered little information about who might have wanted him dead. In a later interview with The Times Orange County Edition, he said his assailant was a burglar.

But Ferrante has since stated in a court document that he was “targeted by two former business partners with ties to the Israeli Mafia,” according to the book “Inside Job: The Looting of America’s Savings and Loans,” written by Stephen Pizzo, Mary Fricker and Paul Muolo.

The book details numerous ties among mobsters and thrift officials accused of looting their institutions. For instance, it details the activities of Mario Renda, a business associate of Bazarian’s who bragged of his ties to Paul Castellano, the boss of New York’s Gambino crime family who was slain in 1985.

Renda and Ferrante were said to have been close enough that they vacationed together in the Caribbean, the book said. “Inside Job” further claims many of Bazarian’s business dealings were allegedly with mobsters.

Besides Ferrante and Angotti, those indicted in the Consolidated case are Ronald L. Bartholomew, 59, of Corona del Mar, the thrift’s attorney; Raymond Lloyd Arthun, 42, of Tustin, a former director and treasurer; Eric Bronk, 44, of Corona del Mar, an attorney; Peter A. Sardagna, 47, of Laguna Hills; William E. Crowder, 42, of Covina; Sigmund Kohnen, 43, of Las Vegas and James C. Allee, 36 of Long Beach.

“I was an outside counsel and I assisted them with the transactions involved,” Bartholomew said. “That’s all.”

None of the others could be reached for comment.

Within the last few months, two people pleaded guilty to charges they participated in fraud at Consolidated. Harlan Wolfe, 61, of Glendale pleaded guilty to falsifying the thrift’s books and failing to file income tax returns. Phil G. Gilbert, 34, of Pacific Palisades admitted to one count of conspiracy in connection with the Forest Ridge loan transaction.

Assistant U.S. Atty. Gregory D. Schetina said Thursday’s indictment is part of an ongoing investigation into Consolidated by the FBI and Internal Revenue Service.

Times Staff Writer James S. Granelli contributed to this article.

CONSOLIDATED SAVINGS INDICTMENTS Robert A. Ferrante Age: 41 Residence: Newport Beach Position: Consolidated owner and onetime chairman Ottavio A. Angotti Age: 54 Residence: La Habra Position: Consolidated chairman, CEO and president Ronald L. Bartholomew Age: 59 Residence: Corona del Mar Position: Consolidated attorney Eric C. Bronk Age: 44 Residence: Corona del Mar Position: Attorney for Ferrante and Consolidated Raymond L. Arthun Age: 42 Residence: Tustin Position: Consolidated director, secretary and treasurer James C. Allee Age: 36 Residence: Laguna Beach Position: Business associate of Arthun Peter A. Sardagna Age: 47 Residence: Laguna Hills Position: Co-owner of Sardagna Consolidated, a former Consolidated loan broker William E. Crowder Age: 42 Residence: Covina Position: Real estate developer and general partner in Forest Ridge Partnership Ltd. of Austin, Tex. Sigmund Kohnen Age: 43 Residence: Las Vegas Position: President of CB Financial Corp., an Oklahoma loan syndicator