Lincoln S&L;’s Ex-Lawyer Guilty of Conspiracy

Mark S. Sauter, a former lawyer for Lincoln Savings & Loan and its parent firm, pleaded guilty Monday to a federal charge of conspiring to deceive regulators by altering the thrift’s loan files.

Sauter was arraigned early Monday before Magistrate Charles F. Eick and was released on a $100,000 unsecured bond.

The plea was entered as part of an agreement with the U.S. Attorney’s Office in which Sauter is expected to testify against former Lincoln owner Charles H. Keating Jr. and other top officials of the thrift and its parent firm, American Continental Corp.

Sauter faces a maximum penalty of five years in prison, a $250,000 fine and restitution.

Phoenix-based American Continental went bankrupt in April, 1989, and regulators seized the thrift a day later. The company is being liquidated, and regulators sold Lincoln’s branch system earlier this month. Regulators estimate that Lincoln is the nation’s biggest failure, costing taxpayers $2.6 billion.

Sauter was charged Friday with conspiracy to defraud regulators for helping to stuff the thrift’s loan files by adding documents after loans were made and, later, “knowingly and willfully” lying to regulators to cover up their actions.

“He is the first Lincoln official to admit to criminal complicity in a scheme to defraud federal examiners,” said David A. Sklansky, an assistant U.S. attorney.

The charge arises from an ongoing federal grand jury investigation that has targeted Keating, former chairman of American Continental and others. Sauter is the second high-ranking executive and third defendant to enter into a federal plea bargain.