Ex-Bank President Hopes to Repay His Fraud Victims : Sentencing: John B. (Whitey) O’Donnell owes $2,845,959.07 in restitution. The federal prosecutor who helped send him to prison believes O’Donnell is sincerely contrite, but says it’s a long shot that those who lost money will get it all back.

Even the federal prosecutor who helped send him to prison for an investment scam believes that John B. (Whitey) O’Donnell, former president of Torrance-based Republic Bank, sincerely wants to pay back the $2.8 million he owes his many victims.

But Assistant U.S. Atty. John Libby acknowledges that probably the only way the hapless investors will ever get more than a small portion of their money back is if O’Donnell hits a lucky streak.

O’Donnell “has certainly expressed a desire to make his victims whole,” Libby said. “But (the restitution) is going to come in very slowly.”

Libby added: “But, as I’ve heard judges sometimes say, who knows? Maybe he’ll win the lottery.”

O’Donnell, 58, pleaded guilty in May to 18 counts of money laundering and mail, wire, bank and securities fraud for schemes involving phony investment pools and fraudulent bank loans. He was sentenced this week to a 41-month federal prison term. It was the lowest possible sentence under sentencing guidelines. He also was ordered to pay $2,845,959.07 in restitution to 20 victims whose losses ranged from $5,000 to more than $1 million.

O’Donnell, a former Redondo Beach resident, was arrested in February in Dallas and charged with defrauding Republic Bank of $550,000 in unsecured loans between 1986 and 1990, when he resigned as bank president. Later, O’Donnell posed as an agent for the New York investment house of Dreyfus Management Inc. and promised investors large returns from bogus “preferred investor pools.”

Libby described the investments program as “a classic Ponzi scheme,” in which new investors’ money was used to pay off old investors.

“I feel very, very badly about the events that brought me to this low point in my life,” O’Donnell, dressed in blue prison slacks and shirt, told U.S. District Judge Dickran Tevrizian before sentence was imposed Monday. O’Donnell promised to “work very hard to (repay) the people harmed by my actions.”

Richard Walton, O’Donnell’s attorney, acknowledged that it is “problematic” whether O’Donnell will ever pay back the investors. O’Donnell declined to be interviewed, Walton said.

The victims declined to comment on the sentence or the possibility of recovering their money.

O’Donnell, who had faced a maximum sentence of 155 years in prison, has been in custody for eight months already. With “good time” credit, he will be eligible for release in early 1996.

And when he gets out, he may have a job lined up. He has been promised a $60,000- to $70,000-a-year job with Carson-based National Golf and Tennis, which operates golf courses.

Company President Jim Duffin, who attended O’Donnell’s sentencing, said he does not know what job O’Donnell will have with the company, although a court order forbids him from having any position in which he would control company funds.

“I think he’s a good man,” said Duffin, who said he met O’Donnell about eight years ago when he was president of Republic Bank and remains his friend. “But I think he got sidetracked.”

O’Donnell has about $800,000 in equity in a home in Dallas that will be used for part of the restitution payments, but he has no other significant assets. By court order, he will work out a restitution payment schedule after his release.