Fellow Defendants Could Benefit From Keating Sentence : Justice: Nine others, including his son, may receive shorter terms than the 12 years imposed on the S&L; operator.
Nine others convicted on charges stemming from the Lincoln Savings & Loan scandal could benefit from the relatively moderate sentence given to Charles H. Keating Jr., the Irvine thrift’s former operator.
Federal prosecutors themselves have laid the foundation for giving light sentences to the other defendants, especially Keating’s son, Charles H. Keating III.
Father and son were convicted Jan. 6 of racketeering, conspiracy and fraud for looting Lincoln and swindling small investors in its parent company, American Continental Corp. U.S. District Judge Mariana R. Pfaelzer sentenced the father Thursday to 12 years, seven months in prison.
Prosecutors had called for a 25-to-30-year term for the elder Keating, citing the S&L;’s huge losses, Keating’s lack of remorse and the vulnerability of the small investors, mostly elderly Lincoln customers. But they also said Keating had led astray a host of employees and associates, including his son.
“Keating led into crime a large group of young, talented individuals who otherwise may have led productive and unblemished careers,” wrote Assistant U.S. Attorneys Alice C. Hill, David A. Sklansky and Matthew Frank.
“It was defendant Keating’s modus operandi to recruit young professionals, pay them well, demand absolute and unquestioning loyalty and turn their talents to use in furthering his fraud,” they said.
The young Keating, known as “C3” to the Keating family and associates, was the only boy among six children. Like his autocratic father, he was a world-class swimmer, going one-up on the old man by making it to the Olympics.
The younger Keating headed a Phoenix-based real estate subsidiary of Lincoln, with a knack for finding farm land to purchase cheaply for development. Often, though, his father berated and belittled him in front of other executives in the web of companies operated by Lincoln and American Continental.
In sentencing the elder Keating, Pfaelzer said she found no mitigating factors, describing how he “directed and manipulated” his own family to further his frauds, shielding them from the scope of his crimes.
Of all the aggravating factors listed in the Keating probation reports, the huge monetary losses in the case are by far the most important. In their sentencing memorandum to Pfaelzer, Keating’s lawyers spent several pages arguing that Keating should be blamed for only $750,000 in losses, instead of the $962 million cited in the probation report.
Dennis Landin, the public defender representing the younger Keating, said he will argue that his client should not be held responsible for any losses. If Pfaelzer agrees, the son could walk free in a fraction of the 10 years that his father must serve before he is eligible for release.
The other eight defendants pleaded guilty to various charges. They are former American Continental or Lincoln executives Judy J. Wischer, Robert M. Wurzelbacher Jr., Andrew F. Ligget, Robin S. Symes, Raymond C. Fidel, Mark Sauter, Bruce F. Dickson and former Lincoln borrower Ernest C. Garcia II, a Tucson developer.
