Developer Convicted in Thrift Conspiracy

A federal court jury Tuesday convicted former Woodland Hills developer Michael R. Goland of conspiring to secretly take over a Santa Monica savings and loan using $900,000 borrowed from state Sen. Alan Robbins (D-Tarzana).

Goland was found guilty after a three-week trial in which prosecutors said he bought a controlling interest in Viking Savings & Loan by funneling $1.1 million through 10 friends and business associates posing as independent investors.

The verdict marked Goland’s second federal conviction in less than a year. In May, another federal jury found him guilty of making illegal campaign contributions to a minor-party candidate in an effort to tilt the 1986 U.S. Senate race toward Sen. Alan Cranston (D-California).

Goland, 44, was convicted of 20 counts of conspiracy and filing false documents with federal regulators in his 1986 takeover of Viking. He faces a maximum of 100 years in prison and $5 million in fines.

Also convicted was Clifford Sherwood, former chief executive officer of Balboa Construction Co., which Goland sold last year. Sherwood was found guilty of four counts of conspiracy and filing false documents. Both men are scheduled for sentencing April 17 by U.S. District Court Judge Edward Rafeedie.

Assistant U.S. Atty. George B. Newhouse said Goland tried to take over Viking--then a one-branch thrift on Wilshire Boulevard--so he would have a source of financing for real estate ventures and as a source for loans to pro-Israel candidates seeking federal office.

Prosecutors said Goland believed regulators would reject an application to acquire Viking if he was named a major shareholder. Before the purchase, Goland had expressed interest in purchasing at least three thrifts in Texas, Pennsylvania and California, they said.

Goland borrowed the lion’s share of the money used to take control of Viking from Robbins, a longtime business associate, prosecutors said. There was no evidence, however, that Robbins knew how the money would be used, Newhouse said.

Prosecutors told jurors that although Goland claimed his involvement in Viking was limited to urging friends to buy its shares as a good investment, he actually exercised close control over the savings and loan’s operations.

Goland put up most or all of the money used by the 10 “straw buyers” to buy Viking stock, including one man who did not know shares had been purchased in his name until two years later, prosecutors said. Also, Goland selected Viking’s board members, hired its president and set loan terms for its customers.

Within two days of acquiring Viking, prosecutors said, Goland pressured the thrift’s president to make an unsecured $100,000 loan to Robbins, the maximum amount that could be loaned without collateral at the time.

During his testimony, Goland said he put up money for the takeover only because he wanted to make his friends rich.

“It’s hard to spend time with all of your friends . . . in an environment where you’re wealthy and they’re not,” he testified. “If they are wealthy, or have a reasonable prospect of being wealthy, then money would never become an issue between us.”

Prosecutors had hoped to call Robbins to testify in the case, but later they said he would not be called. Newhouse declined to comment on the reasons.

Robbins said last July that he and Goland had been partners in developing three apartment buildings and that they were then still partners. Robbins, who built medical offices and apartment buildings before he was elected to the state Senate in 1973, said he had no knowledge of how Goland was using the loan money.

Goland was convicted in May of making an illegal $120,000 campaign contribution to a third-party candidate as part of an attempt to manipulate the 1986 U.S. Senate race into a victory for Cranston. He was sentenced to three months in jail and 1,000 hours of community service.

Viking was purchased in April, 1989, by Westside Bank of Southern California. Westside paid $370,130 for Viking, which was designated by regulators the month before as a troubled thrift.