Judge Refuses to Dismiss Charges Against Keating : Thrifts: The ‘heart of the case’ facing the former Lincoln Savings & Loan owner is upheld. The trial on 21 counts is scheduled to begin Aug. 2.

A Superior Court judge refused Friday to dismiss securities fraud charges against former thrift owner Charles H. Keating Jr. and three others, setting the stage for the first criminal trial stemming from the failure of Lincoln Savings & Loan.

Judge Lance A. Ito in Los Angeles said that enough evidence was brought before a grand jury to show that crimes were committed and that there was a “strong suspicion” that the four defendants committed those crimes.

Ito, who had dismissed 25 counts previously, upheld the remaining 21 counts that the prosecution has termed the “heart of the case.” The trial is slated to begin Aug. 2.

The indictment, issued by a state grand jury, accuse the Keating group of making false and misleading statements or omitting material information in the sale of bonds at Irvine-based Lincoln’s Southern California branches.

Conviction on any six counts will subject the defendants to the maximum penalty of 10 years in prison.

“The ruling we hoped for is the ruling we got,” said William Hodgman, the deputy district attorney heading the prosecution team. To Jeri Mellon of Sherman Oaks and other bondholders who praised him after the hearing, Hodgman cautioned, “This is only one battle.”

Keating had no comment, but he was overheard telling an associate after the ruling, “I thought we had a good chance” at getting the whole case dismissed.

Defense attorneys had argued that there was no evidence before the grand jury linking the four defendants to alleged misrepresentations in the bond sales. But the judge’s ruling implied that such factual issues should be up to a trial jury to decide.

The other defendants are Judy J. Wischer, a top Keating aide, and Robin S. Symes, a former Lincoln president. A fourth defendant, Ray C. Fidel, another former Lincoln president, has pleaded guilty to six counts and agreed to testify against his co-defendants.

Thousands of small investors, mainly elderly Lincoln depositors, bought more than $250 million in bonds sold by Lincoln’s parent company, American Continental Corp. in Phoenix. Many say they were misled into believing the bonds were insured or at least as safe as their insured certificates of deposit at Lincoln.

Their bonds became worthless after American Continental filed for bankruptcy protection in April, 1989. Regulators seized Lincoln the next day. The company is being liquidated. The S&L;’s branch system was sold earlier this year, and its liquidation is expected to cost $2.6 billion, making Lincoln the biggest thrift failure to date.

The Keating group was indicted in September by a state grand jury on 42 counts. Ito dismissed 22 counts but gave prosecutors a chance to amend the indictment. When they came back with 46 counts, Ito threw out 12 counts and, earlier this month, 13 more counts.

Bondholders, anxious about the possibility that the judge might dismiss more counts today, held an hour-long rally Thursday in front of the Criminal Courts building in an effort to persuade the judge to keep the remaining case intact. They were overjoyed with his ruling today.

“I’d like to seek Keating in jail already,” said Marsha Kruger of Woodland Hills, a teacher who lost her $75,000 inheritance and savings in the collapse of Lincoln and American Continental.