Keating Agrees to Settle Charges by Regulators of Civil Fraud

Charles H. Keating Jr., the former Lincoln Savings & Loan operator serving a 12-year federal prison sentence, has agreed to settle civil fraud charges brought by securities regulators, lawyers told a judge Monday.

Keating, who contends that he is broke, has only to provide a detailed financial statement for the deal to be completed, Securities and Exchange Commission attorney Rory Flynn told U.S. District Judge Stephen V. Wilson.

Keating’s son, Charles H. Keating III, also settled the civil case brought by the SEC, said Scott Devereaux, a lawyer for the Keatings.

Keating and his son were convicted 14 months ago on criminal fraud, racketeering and conspiracy charges stemming from the collapse of the Irvine thrift five years ago. The younger Keating is free pending appeal of his criminal conviction.

Lincoln’s failure is the nation’s costliest, leaving taxpayers with a $3.4-billion repair bill.

After Monday’s brief court session, Devereaux and Flynn declined to discuss the elder Keating’s settlement until it becomes final.

A source who knows about the deal and spoke on condition of anonymity said Keating agreed to repay millions of dollars--if he is ever found to have hidden assets. The source said the agreement would not allow the SEC to seize future earnings, assuming the 70-year-old convict generates any.