Ex-Lincoln Chief Enters More Guilty Pleas

A former Lincoln Savings & Loan president pleaded guilty Tuesday to six counts of state securities fraud and agreed to cooperate with officials prosecuting Charles H. Keating Jr., the thrift’s former owner.

Ray C. Fidel, president of Irvine-based Lincoln when it failed in 1989, changed his pleas from innocent to guilty on allegations that he helped mislead investors who bought risky junk bonds at the thrift’s branches.

“This is a very significant development for our case,” said William Hodgman, a Los Angeles deputy district attorney prosecuting the state charges. “As one of Keating’s top lieutenants, we expect him to be able provide a great deal of information.”

On Monday, Fidel pleaded guilty to two similar federal charges. State prosecutors said he was also cooperate in the federal investigation of Keating and his associates for their activities at Lincoln.

Fidel, 33, entered his plea to the state charges before Superior Court Judge Lance A. Ito. Fidel will be sentenced March 16, 1992, providing ample time for the Newport Beach resident to testify against Keating and two other co-defendants. The trial is set to begin in August.

The plea agreement calls for Fidel to be sentenced first to the federal charges, with his state sentence to run concurrently. In the federal case, he faces a maximum sentence of 10 years in federal prison, a fine of $500,000 and payment of restitution.

Fidel is expected to provide information and testimony about the sale of more than $200 million in American Continental Corp. bonds at Lincoln branches. The bonds became worthless when American Continental, Lincoln’s parent, filed for bankruptcy in 1989.

Regulators seized Lincoln the next day and operated it until selling 28 branches last Friday to Great Western Bank. Regulators estimate Lincoln’s loss at $2.6 billion, the costliest taxpayer tab ever for a single failed thrift.

Fidel, who ran the day-to-day operations of the thrift, was the point man for the bond sale program, especially in the months before the thrift’s collapse. Prosecutor Paul Turley said Fidel will be one of the prosecution’s most important witnesses.

But defense attorneys claim that Fidel’s testimony won’t damage their clients. Keating, former American Continental President Judy Wischer and Robin Symes, another former Lincoln president, have all pleaded not guilty to state securities fraud.