Robbins Pleads Guilty to Loan Fraud Charges

Former state Sen. Alan Robbins (D-Van Nuys), already serving a prison term on federal corruption charges, pleaded guilty Monday to three counts of providing fraudulent information about his financial status to obtain a $900,000 loan from the Independence Bank of Encino.

U.S. Dist. Judge Robert M. Takasugi set sentencing for Dec. 15. Robbins could get up to six more years in prison and a $750,000 fine for the offenses, but there were indications that under a settlement with government prosecutors he is likely to receive “concurrent time”--in short, a sentence that would not add to the time he is already serving.

Robbins also agreed in the settlement to eventually make full restitution of $3,380,000, plus interest two points above the bank’s basic rate, for loans he has taken from Independence Bank since 1985. He has already repaid the $900,000 loan he obtained in 1985.

S. Thomas Pollack, the former lawmaker’s attorney, said the settlement wraps up all prosecutions of Robbins by the Los Angeles office of the U.S. attorney. That office investigated Robbins’ banking violations; the U.S. attorney’s office in Sacramento dealt with the corruption cases.

Robbins was brought to the court in prison garb from the federal camp at Lompoc, where last June he began serving a five-year sentence for racketeering and income tax evasion. With good behavior, Robbins will be able to cut the time he serves by up to 54 days each year.

During his appearance Monday before Takasugi, Robbins appeared much more physically fit than when he entered prison. He was well tanned and showed the effects of a regimen that includes running several miles every day at the minimum-security institution. He spoke incisively in court and appeared in good humor.

Almost a year ago, Robbins startled his Senate colleagues and pleaded guilty to the political corruption charges, promising as part of his plea bargain to cooperate with authorities in other prosecutions.

For at least five months before stepping down from the Senate, Robbins had worn a hidden recording device to aid the inquiry.

When he resigned, Robbins was at the height of his power, exerting widespread influence on insurance issues as chairman of the Senate Insurance, Claims and Corporations Committee. He also was the San Fernando Valley’s loudest champion in the Legislature.

Outside the Legislature, Robbins had built a business empire resting on property developments from Marina del Rey to Ventura County.

But even before his indictment last year, Robbins’ financial troubles surfaced when his Marina East Holding Partnership filed for federal bankruptcy protection, listing $7.6 million in debts to banks, lawyers and developers. The partnership listed Independence as its biggest creditor.

After the bankruptcy petition was filed, Fulvio V. Dobrich, then chairman of Independence, said Robbins’ loans “were not kosher loans. They were not proper, they’re not what a prudent banker would do. It just makes you angry when you have to run a bank and deal with these kinds of loans.”

Independence Bank was secretly controlled by the scandal-ridden Bank of Credit and Commerce International and last January was abruptly shut down by federal regulators after they determined that bad real estate loans had rendered it insolvent.

Last month, a second real estate partnership headed by the former senator, Club California of North Hollywood, filed for federal bankruptcy protection.

However, his attorney said Monday that Robbins, when he gets out of prison, will ultimately be able to make restitution of the outstanding Independence Bank loan through sale of other property he owns.

According to an official “information” released Monday by the prosecutor, Assistant U.S. Attorney James R. Asperger said--and Robbins confirmed to the judge--that the former senator “knowingly signed a false statement” on Feb. 13, 1985, which failed to mention that he had a $1,450,000 unsecured loan from Mercury Savings & Loan Assn. and had guaranteed another $350,000 Mercury loan to a business associate, Michael Goland.

Later, on April 15, 1985, while applying for renewal of the $900,000 loan he had obtained from Independence Bank that February, Robbins also failed to mention a $100,000 unsecured loan he had from Mercury Savings.

Still later, on May 1, 1987, he failed to mention a $100,000 unsecured loan from Viking Savings & Loan, and a $1,650,000 contingent liability for an unsecured loan to the Marina East Holding Partnership from Mercury.

Asperger said the government takes false statements on loan applications most seriously, and believes prosecution of such cases, when they come to government attention, must go forward diligently.

However, Robbins told Takasugi that he was not sure he had read the fine print on the loan application before signing the loan papers, and had, in any case, informed Independence Bank officials orally about his other outstanding loans.