Ex-Lincoln Aide Embezzled Funds : Courts: Former in-house lawyer pleads guilty in federal court to taking $1.6 million from the Irvine thrift and its parent firm during a 2 1/2-year period.

Mark S. Sauter, a former in-house lawyer for Lincoln Savings & Loan and its parent company, pleaded guilty Monday in federal court in Los Angeles to embezzling $1.6 million from the Irvine thrift during a 2 1/2-year period.

Sauter, who appeared before U.S. District Judge Robert M. Takasugi, faces a maximum prison term of five years.

Sauter faces a similar prison term under an earlier plea agreement he reached with federal prosecutors in March, 1991, after pleading guilty to one count of conspiracy. He agreed to testify against his former boss, Charles H. Keating Jr., then chairman of Lincoln’s parent company, American Continental Corp.

Keating was sentenced Friday to 10 years in a California prison for his conviction last December on 17 counts of state securities fraud. He is also charged in two federal indictments with conspiracy, fraud and racketeering and faces more than 500 years in federal prison.

Sauter’s lawyer, Gordon A. Greenberg of Los Angeles, said he learned about the embezzlement in talks with his client several months ago. They approached the U.S. attorney’s office, which has been directing a grand jury investigation into Lincoln’s 1989 collapse for more than two years.

Federal authorities, however, already had developed information on the embezzlement, said Assistant U.S. Atty. David A. Sklansky. The information came from a source after Sauter pleaded guilty to the conspiracy charge, he said.

Greenberg and prosecutors debated whether the new information was covered by the plea bargain. Prosecutors contended that it wasn’t, and Sauter, who now lives in Cincinnati, decided to “take responsibility for it and get it behind him,” Greenberg said.

Neither Greenberg nor Sklansky would discuss the nature or the number of the embezzlements, which occurred between January, 1985, and August, 1987.

In his plea last year, Sauter admitted that he helped to defraud regulators by stuffing Lincoln’s loan files with new documents after loans were made and, later, by “knowingly and willfully” lying to regulators to cover up the actions.

Sentencing on both cases is tentatively scheduled for Nov. 9. Lincoln is the nation’s biggest thrift failure, costing taxpayers $2.6 billion.