Prosecutor Ill; Keating Fraud Trial Delayed : Courts: Judge orders closing arguments to be made Thursday to allow the deputy district attorney time to recover.

The lead prosecutor in the securities fraud trial of Charles H. Keating Jr. was sidelined by the flu Tuesday, resulting in the postponement of closing arguments until Thursday morning.

Deputy Dist. Atty. William Hodgman has been fighting flu symptoms for the last week, but finally was forced by a fever late Monday to stay in bed, said Deputy Dist. Atty. Paul Turley, who is helping him prosecute the case.

Superior Court Judge Lance A. Ito granted Turley’s request to delay the proceedings until Hodgman feels better. The judge rejected defense suggestions that Hodgman be asked to return today or that Turley fill in.

“My client is entitled to an expeditious trial in this matter,” protested Stephen C. Neal, Keating’s lawyer.

The prosecution’s closing statement in the first criminal trial stemming from the collapse of Irvine-based Lincoln Savings & Loan is expected to take up to five hours. The defense is expected to take up to two hours to present its final arguments.

Neal rested his case last week without presenting any defense witnesses. He contends that prosecutors and their 53 witnesses, who testified over the past two months, failed to prove his client committed a crime.

Keating is accused in 18 counts of defrauding 20 small investors who bought bonds issued by Lincoln’s parent company, American Continental Corp. They are among thousands who lost more than $250 million after the Phoenix company and the thrift failed in April, 1989.

Neal contends that Keating hired top lawyers and accountants to structure and monitor the bond sales program and that they, not Keating, decided what to tell customers.

The criminal case is focused narrowly on bondholder losses.

Federal authorities reportedly are preparing a major indictment that would include charges relating to the collapse of Lincoln. The S&L; is the biggest thrift failure to date and is expected to cost taxpayers $2.6 billion.

So far, a major Lincoln borrower, two former Lincoln executives and a former American Continental executive have pleaded guilty to federal charges and have agreed to testify against Keating.