3 Officers of Central Savings Named in Federal Lawsuit : Banking: ‘Risky, speculative ventures’ resulted in $80-million in losses, government alleges.

A civil lawsuit filed by federal banking regulators alleges that three former officers of Central Savings & Loan steered the now-defunct institution into a string of unsound business ventures that prompted the S&L;’s failure in 1985.

Former Central executives Daniel T. McSweeney, Frederick C. Stalder and James Marks were named in the suit that the Federal Deposit Insurance Corp. filed Friday in U.S. District Court in San Diego.

The suit, which seeks unspecified damages, alleges that the three executives entered “several risky and speculative business ventures” that resulted losses in excess of $80 million at the San Diego-based S&L.;

Stalder, 70, a local businessman who serves on San Diego Gas & Electric’s board of directors, and McSweeney, a San Diego businessman, did not return telephone calls Monday.

The Times was unable to contact Marks.

FDIC officials in Washington declined to comment on the suit, as did James H. Lauer Jr., an attorney with Schall, Boudreau & Gore in San Diego, who filed the suit Friday.

Stalder, a long-time Central executive, served on Central’s board of directors from 1947 through 1985, and as president until 1980. He served as chairman until the institution was seized by federal regulators in 1985. McSweeney joined Central’s board in 1978 and was appointed president in 1980. McSweeney was “terminated” in 1984, according to the suit. Marks was a vice president at Central from 1979 to 1983.

The suit alleges that Central’s financial woes date back to 1980, when McSweeney, then the S&L;’s newly appointed president, steered Central into a series of ventures that were “poorly planned and executed and insufficiently reviewed, controlled or supervised.” McSweeney’s diversification produced “a disastrous financial condition” from which Central never recovered, according to the complaint.

The suit alleges that the FDIC eventually lost $70 million alone on a Lake Arrowhead vacation community real estate development project that McSweeney initiated.

The project was transferred to Coast Savings & Loan, which acquired certain Central assets in 1987, but the FDIC eventually was forced to absorb the $70-million loss, according to the complaint.

The suit also alleges that Central, again at McSweeney’s direction, acquired $93.4 million in junk bonds sold through Drexel Burnham Lambert.

The bond acquisitions “exceeded applicable regulatory limits and were speculative investments unsuitable for Central,” according to the suit.

Stalder, the suit alleges, knew of the detrimental effects the deals had on Central’s financial status.

But he “failed to take any steps to prevent McSweeney from carrying out his programs,” according to the suit. Marks “worked closely with McSweeney in developing and implementing” Central’s failed investments, according to the suit.

Federal regulators took control of Central in 1985 when it had a negative net worth of $56.3 million. After seizing Central, regulators turned control of the institution over to an Arizona-based S&L.;

Regulators subsequently sold many of Central’s assets to Los Angeles-based Coast Savings & Loan in 1987.

Coast in January sold its San Diego branch operations, including the old Central branch system, to Home Savings of America for $20 million.