Savings Bank Figure Acquitted of Conspiracy : Courts: Robert Ferrante had been target of FBI inquiry into operations of the now-defunct Irvine thirft that he owned.

Robert A. Ferrante, the target of a five-year, top-priority FBI investigation, was acquitted Monday of all criminal charges stemming from the operation of now-defunct Consolidated Savings Bank in Irvine.

Three co-defendants were also acquitted, but two others, Ottavio A. Angotti and Raymond L. Arthun, were convicted on conspiracy and fraud counts relating to $4 million in loans that Consolidated made to Pyrotronics Corp. in Anaheim, once the state’s biggest maker of so-called safe-and-sane fireworks.

After the verdict, Angotti and Arthun left the courtroom quickly. The others celebrated in the hallway outside.

“Now I’m happy,” said Ferrante, 42, formerly a Newport Beach developer and sole owner of Consolidated.

The other defendants acquitted--Peter Sardagna, a Ferrante associate; Ronald L. Bartholomew, a Consolidated lawyer, and Sigmund Kohnen, president of CB Financial Corp. in Oklahoma--beamed broadly as they congratulated each other and their lawyers.

Attorneys for Angotti and Arthun said they were shocked that their clients were convicted on any counts relating to the Pyrotronics deal and said they will appeal the verdict.

Federal prosecutors, who dismissed 11 counts against Ferrante in mid-trial because of lack of evidence, said they were pleased with the convictions they won.

“We’ll accept the verdict,” said a smiling Richard Robinson, the assistant U.S. attorney who headed the prosecution team.

“In the overall context, this prosecution has been productive,” he said. Previously, five others who did business with Consolidated pleaded guilty to charges stemming from the same transactions alleged in the indictment.

The six men had been charged in a 17-count indictment with conspiracy in two separate deals and with causing Consolidated to misapply depositor funds and to make false entries on its books. The indictment did not allege that the two deals led to Consolidated’s failure in 1986.

U.S. District Judge Mariana R. Pfaelzer, who presided over the non-jury trial, exonerated all the defendants on charges that they conspired to funnel a series of loans totaling $9.5 million to CB Financial--an investment firm headed by one-time financier Charles J. Bazarian--to benefit a Ferrante project in Texas. Bazarian is one of the five who pleaded guilty in the Consolidated prosecution.

In announcing her verdict, Pfaelzer said that the government presented a strong case but that cross-examinations of several key witnesses about the CB Financial loans showed that their testimony was not believable. That raised “reasonable doubt” in her mind, she said, about the guilt of the defendants.

Pfaelzer said she found the evidence more credible, however, on the Pyrotronics deal and convicted the two defendants accused of wrongdoing in that transaction. Angotti, Consolidated’s former chief executive, was found guilty on 11 counts and faces 55 years in prison. Arthun was convicted on 12 counts and faces 60 years in prison. Sentencing is scheduled for Nov. 2.

Ferrante had also been accused on 11 counts in the Pyrotronics transaction, but lack of evidence forced the dismissal of those counts. He still faced three counts involving the CB Financial loans.

The indictment accused Ferrante, Angotti and Arthun of conspiracy and other violations in lending Pyrotronics more than $4 million, an amount that exceeded regulatory limits on loans to one borrower. The loans, however, were repaid with interest.

The indictment alleged that the loans were laundered through the thrift’s friends and Ferrante’s 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 and other charges. Moriarty was eventually convicted of mail fraud and served 27 months in prison.

Consolidated would be a forgettable footnote in the savings and loan debacle if not for Ferrante’s notoriety, his willingness to fight regulators and the prosecution’s view that the case was a major one. 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, had done business with convicted criminals and associates of alleged mobsters. He won a charter for Consolidated in 1983 and opened the thrift a year later.

Consolidated grew to about $84 million in assets, but its executives frequently clashed with regulators, who feared that the thrift was making risky investments. Regulators finally seized it in May, 1986, saying that it was insolvent and had made improper insider loans. They closed the thrift three months later.