Down and Out in Beverly Hills : Ex-Thrift Chief Thomas Spiegel, Awaiting Trial, Is Being Evicted

Former Columbia Savings & Loan chief Thomas Spiegel, facing criminal charges that he looted millions of dollars from the failed thrift, has plenty of legal problems.

Now he has a housing problem too.

While Spiegel is asking the courts to let him pay more than $250 an hour so he can hire the lawyers he wants, he’s defaulted on the mortgage covering his Beverly Hills mansion. This week he was served with an eviction notice.

Who owns the house now? The U.S. government, whose criminal case against Spiegel stems from, among other things, his alleged diversion of thousands of dollars from the Beverly Hills-based Columbia to pay for interior decorating at the mansion.

The Resolution Trust Corp., the federal agency disposing of failed thrifts’ assets, inherited Spiegel’s mortgage as part of Columbia’s assets when it became the S&L;’s receiver. The once high-flying thrift suffered huge losses in 1989-90. It was seized by the industry regulator, the Office of Thrift Supervision, in early 1991 and turned over to the RTC. Spiegel had quit as Columbia’s chief executive in late 1989.

With Spiegel missing mortgage payments over the last several months, the RTC held a foreclosure auction on the 9,300-square-foot house last month and bought the property for $3.1 million when no higher bid surfaced, RTC spokesman Steve Katsanos said. The RTC hopes to resell the house later, he said.

On Tuesday, the RTC sent Spiegel an eviction notice, to which he had 10 days to respond, Katsanos said. Spiegel had not responded as of Friday, the RTC said.

Spiegel, 47, did not return telephone calls to his office, and a woman who answered the phone at the home referred inquiries to the office. It could not be confirmed that Spiegel still lived in the house.

Spiegel, the nation’s highest-paid savings and loan executive during Columbia’s heyday in the mid-1980s, faces 60 criminal counts related to his alleged squandering of the thrift’s assets to support his luxurious lifestyle during the 1980s. The OTS has a similar civil complaint pending against Spiegel, and that agency is seeking at least $45 million in restitution and fines. Spiegel denies the charges.

The OTS also has frozen Spiegel’s assets and placed limits on how much he can spend without first getting the agency’s approval. Why he defaulted on the mortgage couldn’t be determined. Therese Pritchard, OTS deputy chief counsel, would say only that Spiegel had the agency’s permission to make the payments.

The OTS won’t estimate the value of Spiegel’s assets or his net worth, but in 1985, he earned $9 million.

Spiegel had asked the OTC’s permission to pay various law firms nearly $2 million for their work last year on his defense, according to Assistant U.S. Atty. John Walsh, who is prosecuting the federal criminal case. The OTS confirmed that it also approved those payments.

The OTS order included the $250-an-hour maximum on how much Spiegel can pay for lawyers, and barred him from paying any up-front retainer. His lawyers of choice, prominent defense attorneys Robert Morvillo in New York and Richard Marmaro in Los Angeles, want both. Marmaro said his “customary hourly rate” is higher than $250, but declined to elaborate.

Walsh said court records show Morvillo and Marmaro want retainers of $750,000 and $350,000, respectively, from which they would subtract fees of $350 an hour or more. They have made occasional appearances for Spiegel but have not generally represented him.

Spiegel asked the judge in the criminal case, U.S. District Judge Robert M. Takasugi in Los Angeles, to overturn the OTS’ order on grounds it violated his 6th Amendment right to his attorney of choice. Takasugi refused.

So Spiegel asked the U.S. 9th Circuit Court of Appeals to overturn Takasugi’s decision. The appellate court also refused, but said Spiegel could still ask Judge Stephen V. Wilson, who is overseeing the OTS’ civil case against Spiegel, to change the $250-an-hour cap.

The appellate court’s recent decision also used a dose of sarcasm in its recitation of the case’s facts. Morvillo and Marmaro, it noted, apparently “will not work on such skinflint terms” as $250 an hour.

“Not only is the hourly rate low, we are told, but no white-collar criminal lawyer of their stature will take on a major case like this without a hefty retainer,” the court noted.

So the question remains: Does Spiegel, nearly a year after he was indicted, yet have a lawyer for his criminal trial, set to begin Jan. 11?

Maybe.

Because of the uncertainty about whether Morvillo and Marmaro would handle the case, Takasugi in April named David Reed, a criminal defense lawyer in Los Angeles, to represent Spiegel.

Spiegel is appealing that appointment too.