Keating Pleads Innocent to Federal Charges : Thrifts: The former executive is arraigned on 77 counts in the failure of Lincoln Savings & Loan.
Charles H. Keating Jr. and four associates Monday pleaded innocent to a broad federal indictment charging them with racketeering and fraud in connection with the 1989 collapse of Irvine-based Lincoln Savings & Loan.
The arraignment on the federal charges Monday came just 11 days after a jury in Los Angeles Superior Court convicted Keating on narrower state charges of securities fraud stemming from the sale of his company’s bonds at Lincoln.
Keating showed little emotion as he entered his plea on 77 federal counts of racketeering, bank fraud and other charges in U.S. District Court in Los Angeles. “I plead not guilty,” he said firmly.
A bail-setting hearing is scheduled today before U.S. District Judge Mariana R. Pfaelzer, who scheduled a trial date of Aug. 4. Keating’s attorney, Stephen C. Neal, is seeking a reduction of his $2-million bail, saying his client represented no risk of flight.
The 68-year-old former chairman of the Phoenix-based American Continental Corp., the parent company of the failed Lincoln, has been in custody at the federal Metropolitan Detention Center in downtown Los Angeles since the Thursday indictments.
Also entering not guilty pleas were Keating’s son, Charles H. Keating III, 36; a son-in-law, Robert M. Wurzelbacher Jr., 37; former American Continental President Judy J. Wischer, 43, and Andrew F. Ligget, 34, the company’s chief financial officer. All five defendants were indicted Thursday. Wurzelbacher and Ligget are free on surety bonds of $300,000 and $200,000 respectively, but must substitute that with real property bonds by next Monday. Both have retained their own legal counsel.
Since the indictments Thursday, Wischer and the younger Keating have also been held in the federal jail because they did not post bail of $500,000 and $300,000 respectively. A public defender represented the younger Keating at the arraignment. A lawyer from a private legal group that handles cases for the indigent represented Wischer during the plea process.
Keating would face a maximum sentence of 510 years in prison and $17 million in fines if convicted on all the charges, which consist of racketeering, conspiracy, bank fraud, securities fraud, misapplication of funds and interstate transportation of stolen money. The indictment also seeks to recover at least $265 million in assets allegedly siphoned from Lincoln.
Keating, who has become a symbol of alleged malfeasance and excess in the thrift industry, was convicted in state court Dec. 5 of 17 charges of defrauding investors in American Continental Corp. Keating faces a maximum of 10 years in prison and a $250,000 fine at his sentencing Feb. 7.
Last weekend in Phoenix, FBI agents and deputy U.S. marshals carried out a federal court order freezing Keating’s personal property.