Keating Bond Never Posted, Prosecutor Says

Convicted Lincoln Savings & Loan swindler Charles H. Keating Jr. never posted a $200,000 property bond ordered five months ago by the state court judge who heard the fraud trial, a prosecutor in Los Angeles said Friday.

“Mr. Keating essentially has been out of jail with no bond until the present,” Deputy Dist. Atty. Paul Turley said.

Granting a Keating request on Oct. 17, Superior Court Judge Lance A. Ito allowed Keating to pledge property against his $100,000 bail instead of a cash bond. The property, belonging to Keating son-in-law Thomas Mulhern, was supposed to be worth double that amount.

However, “not a shred of evidence” has been submitted to the court that Mulhern owns and has pledged any property, Turley said.

Keating’s lawyers didn’t immediately return telephone calls Friday. Turley said one of them, Jeffrey Powell, had assured Ito the matter was just an oversight by the Chicago law firm, Kirkland & Ellis. Keating was ordered back to court next Wednesday with proof that the bond has been posted.

Keating’s bail had gradually been lowered from $5 million. The judge has noted, and prosecutors acknowledge, that his record of appearing in court has been excellent.

Keating owned Irvine-based Lincoln through his American Continental Corp. in Phoenix. His hatred for regulators, his enormous salaries and risky investments in land and junk bonds made him a national symbol of the S&L; crisis. Regulators say Lincoln’s failure cost taxpayers $2.6 billion, the costliest thrift collapse in history.

Keating was convicted Dec. 4 of defrauding some of the Lincoln investors who lost more than $200 million on junk bonds issued by American Continental, securities they contend were portrayed as safe investments.

Keating insists that his companies’ collapse, and thus the investors’ losses, were caused by vindictive regulators.

He is to be sentenced April 10. Prosecutors are urging Ito to impose the maximum 10-year term on Keating. They want him sent to prison at once.