Ex-Thrift Owner, 5 Others Face Fraud Trial : Courts: Robert Ferrante of now-defunct Consolidated Savings Bank in Irvine and associates are accused of wrongdoing in deals involving $13.5 million in loans. They will be tried without a jury.
Former thrift owner Robert A. Ferrante and five others, indicted after a five-year, top-priority FBI investigation, will go on trial today in federal court on conspiracy and fraud charges stemming from the operation of now-defunct Consolidated Savings Bank in Irvine.
The six have decided to forgo a jury trial and, instead, will be tried before U.S. District Court Judge Mariana R. Pfaelzer in Los Angeles on a 17-count indictment accusing them of criminal wrongdoing in two deals involving $13.5 million in loans.
One deal involved a series of loans to Pyrotronics Inc. in Anaheim, once the state’s biggest maker of so-called safe and sane fireworks. The other transaction involved a series of loans allegedly funneled through CB Financial Corp., an Oklahoma investment firm headed by one-time financier Charles J. Bazarian, to benefit a Ferrante project.
Ferrante and Ottavio A. Angotti, the tiny S&L;’s chairman, president and chief executive, face up to 70 years in prison each if convicted. The other defendants face 10 to 60 years each.
Consolidated was seized by regulators and closed in 1986. Its failure is expected to cost taxpayers about $30 million.
The indictment, returned last November, is a streamlined version of the original 31-count indictment that was handed up nine months earlier. Several major allegations--mainly bank fraud, mail fraud and wire fraud--were dropped. And former Newport Beach lawyer Eric Chess Bronk, one of the original defendants, was not named in the new indictment.
Prosecutors wouldn’t say why charges were dropped. But Assistant U.S. Atty. Richard Robinson said Tuesday that Bronk was still under investigation. “We thought it was more appropriate to charge him in separate indictment,” Robinson said.
Defense attorneys, however, said they believe that the prosecution’s case is weak and that their clients will be acquitted.
“There are two simple transactions,” said Brian C. Lysaght, one of Ferrante’s lawyers. “Both were totally legal in and of themselves. There was no intent to defraud anyone, and no one was defrauded. The deals were straightforward and legal.”
Angotti’s lawyer, Michael H. Artan, said the prosecution has gone from a wide-ranging indictment to one that essentially alleges that loan documents “did not reflect the true nature of the loans.”
“There is some dispute about how the transactions occurred, the structure of the transactions,” Artan said. “But we don’t think there was anything illegal about the loans to begin with.”
Other defendants are Raymond L. Arthun and Peter Sardagna, both close Ferrante business associates; Ronald L. Bartholomew, a Consolidated lawyer, and Sigmund Kohnen, president of Bazarian’s CB Financial.
Bazarian and four others previously have pleaded guilty to charges stemming from the investigation of Consolidated. Robinson said Bazarian will not testify at trial, but the other four are expected to testify against their former business associates.
Also testifying will be W. Patrick Moriarty, the former chairman of Pyrotronics. Moriarty spent 29 months in prison on his conviction for mail fraud in an unrelated case. Other charges of bribing public officials, laundering political campaign funds and paying kickbacks to bankers were dismissed or thrown out on appeal.
