Florida S&L; Chief Convicted of Fraud : Thrifts: Former Centrust Chairman David Paul used its funds to support his luxurious lifestyle.
Ousted Centrust Bank Chairman David Paul was convicted Wednesday of federal fraud charges for using millions of dollars in thrift funds for his personal expenses while the savings and loan was failing.
Paul, convicted on all but one of 69 counts, faces a maximum of 350 years in prison when he is sentenced Feb. 11. He was acquitted of one minor charge.
Prosecutors asked that Paul, who is free on bond, be taken into custody immediately as a flight risk. They said he had gone to Puerto Rico without permission and that his wife had inquired about political asylum in Israel.
U.S. District Judge Donald Graham refused to jail Paul, but he doubled his personal bond to $1 million.
Paul, 54, led an ostentatious lifestyle while his thrift, once Florida’s largest, was losing money. Centrust’s failure in February, 1990, with a loss of $1.7 billion, was the nation’s fourth-biggest financial institution collapse.
Witnesses at the six-week trial said Paul used Centrust funds to make his $9-million waterfront estate and $7-million yacht more luxurious. Prosecutors charged that $3.2 million in personal spending was hidden in the $140-million construction of Centrust Tower.
Defense attorneys contended that Paul was a self-made man and generous philanthropist brought down by a government vendetta that grew out of a combative relationship with bank examiners.
Some of the most damaging testimony came from former Miami Beach Mayor Alex Daoud, who admitted taking $35,000 in Centrust bribes to help Paul obtain permits for a dock expansion at his house.
Two Centrust vice presidents testifying under plea bargains described how bank money was shuffled to Paul’s house contractors.
The jury considered 47 counts of bank fraud, nine counts of misapplication of Centrust funds, five counts of filing false tax returns, four counts of mail fraud, two counts of obstruction of regulators and one count each of conspiracy and making false entries on Centrust books. Paul was acquitted of one count of mail fraud.
Paul faces a second criminal trial next year for 29 securities fraud charges over disputed bond deals with Charles H. Keating, the former Lincoln Savings & Loan operator convicted in California of savings and loan fraud, and the now-defunct Bank of Credit and Commerce International.