Prosecutors Drop 11 Counts Against Ferrante : Courts: Action reduces to 15 years from 70 the maximum amount of prison time the former owner of Consolidated Savings Bank faces.

Federal prosecutors, lacking evidence after three weeks of trial, dropped 11 of 14 criminal counts Thursday against Robert A. Ferrante as the government rested its case against the former owner of Consolidated Savings Bank and five others.

On their own motion, prosecutors dropped all charges against Ferrante relating to a series of loans that the now-defunct Irvine thrift made to Pyrotronics Inc. in Anaheim, once the state’s biggest maker of so-called safe and sane fireworks.

The three remaining counts accuse Ferrante of conspiracy, misapplying thrift funds and fraudulently participating in loan proceeds. Those charges stem from a series of loans allegedly funneled through CB Financial Corp., an Oklahoma investment firm headed by onetime financier Charles J. Bazarian, to benefit a Ferrante project.

The government’s action reduced from 70 years to 15 years the maximum amount of prison time that the onetime Newport Beach developer faces.

“I’m extremely gratified by the government’s decision,” said Brian Lysaght, one of Ferrante’s lawyers.

Assistant. U.S. Attys. Richard Robinson and Jennifer Lum told U.S. District Judge Mariana R. Pfaelzer that the government was dropping the charges “in the interests of justice.” Neither prosecutor could be reached later for comment.

Pfaelzer, who is presiding over the non-jury trial, heard arguments on defense motions to dismiss the remaining counts against Ferrante and all the charges in the 17-count indictment against the other five defendants. Those arguments will continue when trial resumes Tuesday.

Former Consolidated Chairman Ottavio A. Angotti faces 11 counts on the Pyrotronics transaction, as well as two counts on the CB Financial loans. Raymond L. Arthun, a close Ferrante friend and business associate, is named in 12 counts related to the Pyrotronics loans only.

The other defendants--Ferrante business associate Peter Sardagna, former Consolidated lawyer Ronald L. Bartholomew and Sigmund Kohnen, president of Bazarian’s CB Financial--face charges relating to the CB Financial transaction only. Kohnen is named in two counts; the others each face three counts.

Each count carries a maximum prison term of five years.

Angotti and Arthun are accused of conspiracy and other charges in lending Pyrotronics more than $4 million, an amount that exceeded regulatory limits on loans to one borrower. The loans were repaid.

The indictment alleges that the loans were laundered through the thrift’s friends and business associates before the money made its way to Pyrotronics. The loans also helped Ferrante gain control of the company from W. Patrick Moriarty, who was under investigation at the time for public corruption. He eventually pleaded guilty to mail fraud and served more than two years in prison.

The indictment also accuses Ferrante and the other defendants, except Arthun, of lending $9.5 million to CB Financial, which, in turn, funneled $7.8 million to a Texas real estate partnership named Forest Ridge. The indictment alleges that Ferrante shared in “financial benefits” related to the property, violating banking laws that restrict loans to insiders as well as limit loans to one borrower.

Consolidated would be a forgettable footnote in the savings and loan debacle were it not for Ferrante’s notoriety, his willingness to fight regulators and the prosecution’s view that this was a major case. At the time of the indictment in February, 1991, then-U.S. Atty. Gen. Dick Thornburgh even weighed in with personal comments about the case.

Ferrante, 42, who survived a 1982 assassination attempt, has done business with convicted criminals and associates of alleged mobsters. He won a charter for Consolidated in 1983 and opened its doors a year later.