Key Figure in Rhode Island Crisis Takes 5th

A former bank insurance official whose agency’s collapse crippled dozens of Rhode Island banks gave a litany of refusals when prodded to explain large withdrawals he made on the eve of the banking crisis.

Peter A. Nevola, reading from a card, recited nine times his Fifth Amendment right against self-incrimination during the third day of public hearings Thursday. The sessions resume Monday.

Nevola headed the Rhode Island Share & Deposit Indemnity Corp., or RISDIC, a private corporation that insured deposits at state-chartered credit unions.

RISDIC’s collapse Jan. 1 forced the closure of 45 banks and credit unions. It was one of the most dramatic and widespread bank failures since the Great Depression.

A dozen credit unions still remain shuttered for lack of federal deposit insurance, and 200,000 depositors have no access to more than $1 billion in various checking and savings accounts and certificates of deposits.

Public hearings began Tuesday before a special commission. The focus is withdrawals before the collapse that may have been based on inside information.

In three days of hearings, the commission has questioned 10 witnesses. They include state Sen. John F. Correia, who withdrew $210,000 in December, and East Providence Credit Union President Anthony Aragona, who withdrew more than $29,000.

Before Nevola, only Rhode Island Central Credit Union President John R. Lanfredi, who withdrew $280,000 in late December, refused to answer questions.

In Thursday’s lengthy session, the frustrated investigators endured the Fifth Amendment recitation a dozen times more from Nevola’s wife, Ann, and his mother-in-law, Lucy Cambio. Both also made withdrawals late last year.