VENTURA : Fresno Man Pleads Guilty to Bank Fraud

A former Ventura resident who swindled $7 million from the now defunct Santa Paula Savings & Loan has admitted in court that he lied to banks about his finances and then failed to pay back the loans.

Acknowledging an elaborate scheme to defraud Southern California banks, William F. Williams, 49, of Fresno pleaded guilty Monday to six counts of false statements, bank fraud and conspiracy. He will be sentenced July 20 and could face up to 135 years in jail and $4.5 million in fines.

As part of the plea agreement in U.S. District Court in Los Angeles, Williams’ wife, Mary, will not be prosecuted. But prosecutors are still pursuing the Ventura County mortgage broker they say helped make some of the bad deals. Broker Patrick M. Downey faces trial May 31.

A joint FBI and IRS investigation found that Williams and his wife inflated the income shown on their federal tax returns so banks would grant them loans, said Gary Auer, regional supervisor in charge of the FBI’s Ventura office.

The couple would buy buildings with the loans, then fail to make payments, Auer said. Before the bank could foreclose on the property, the Williamses would transfer the titles to bogus corporations, he said. These corporations would then declare bankruptcy, thus protecting the building from foreclosure.

The charges that Williams pleaded guilty to stemmed from two cases: a $1.5-million loan from the Antelope Valley Bank in Lancaster that was used for construction of a medical building; and a $950,000 loan from American Savings & Loan Assn. of Irvine.

As part of the plea agreement, Williams also acknowledged obtaining and defaulting on five loans from Santa Paula Savings & Loan in the 1980s.

The Williamses bought apartment buildings in Fresno and condominiums in Bakersfield with the money from the small Santa Paula institution, but stopped all payment on the loans by September, 1989, according to court records.

The savings and loan, suffering under the weight of these and other bad loans, was taken over by Bank of A. Levy in 1991. Agent Auer said there was no connection found between bank employees and the couple.