Seymour Requests a Delay in Any Federal Trial of Keating : * Securities: The senator wants American Continental bondholders to have a chance to recover civil damages first.

U.S. Sen. John F. Seymour (R-Calif.) asked the U.S. attorney general Thursday to hold off on any possible federal criminal trial of Charles H. Keating Jr. until after small investors complete efforts to recover losses in civil lawsuits against the Arizona developer.

Keating, who was convicted Wednesday of state securities fraud, is expected to be indicted by a federal grand jury, perhaps as early as next week, according to attorneys close to the case. Federal authorities have been probing Keating, former owner of failed Lincoln Savings & Loan, for two years.

Seymour said he sent a letter to Atty. Gen. William Barr on behalf of thousands of mostly elderly investors who lost more than $250 million after Keating’s financial empire collapsed nearly three years ago. Lincoln’s collapse will cost taxpayers $2.6 billion.

In his letter, Seymour said he understood that federal prosecutors would seek a delay in the civil fraud and racketeering cases, which have been consolidated before a federal judge in Tucson, while the criminal prosecution proceeds.

“I don’t want them to hold back on the (federal) indictments,” Seymour said in an interview Thursday. “I just want the bondholders to have a chance at some recovery soon. Many of these people are senior citizens and aged. We’d like to be able to move ahead of the criminal suit.”

Bondholders, many of whom lost their life savings in Lincoln’s collapse, picketed in front of Seymour’s West Los Angeles office last week. They said a number of them have died while the slow civil process has dragged on, and they fear that many more will die or be left destitute if they don’t recover some money soon.

“It is outrageous that the federal government would do anything to delay the bondholders’ day in court or interfere with their attempts to recover,” said Ronald Rus of Orange, one of the lawyers for the bondholders. “We’ll do everything legally within our power to oppose any stay of our action.”

Terree Bowers, first deputy U.S. attorney in Los Angeles, would not comment on possible indictments. In fact, he would not even discuss whether his office had a policy of seeking delays in civil litigation when grand juries file indictments.

“Just stay tuned,” he said.

Seymour, who is touring Southern California today with President Bush, hopes to get a reply today from Barr, the nation’s top law enforcement officer. He acknowledged that even if Barr accommodates his request, defense lawyers could seek a delay in the civil cases.

Seymour said his staff and lawyers for bondholders met two days ago, and the lawyers prepared a declaration for him explaining the consequences of the proposed delay.

Meantime, in the aftermath of Wednesday’s state court verdict, legal experts said Keating will face difficult roadblocks as he wends his way through the appellate process to try to reverse his securities fraud conviction.

Keating was found guilty on 17 of 18 counts charging him with duping small investors into buying risky American Continental bonds through Lincoln branches. He faces a maximum sentence of 10 years in prison and a $250,000 fine.

Lawyers who followed the case say Keating’s best shots--challenging the adequacy of the evidence or the constitutionality of the law under which he was convicted--are uphill battles that usually lose.

“I think it’s a pretty clean case,” Los Angeles Deputy Dist. Atty. William Hodgman, the lead prosecutor, said of possible legal errors that might result in a reversal by an appellate court. “Most of the critical issues went the way of the defense. We stand an excellent probability of being upheld on appeal.”

Keating’s lawyer, Stephen C. Neal, has said he would appeal the conviction, but he has not said on what grounds. He has consistently maintained that there is “not a shred of evidence” linking his client to any securities fraud.

Hodgman has long acknowledged that his case was built on circumstantial evidence. But there was so much of it, he said, that the case for conviction became “compelling.”