Judge Tosses Out U.S. Civil Case Against Ex-Owner of Irvine Thrift

Robert A. Ferrante, former owner of a now-defunct Irvine thrift, won another victory from federal officials Monday when a judge threw out the government’s $5-million civil penalties case against him.

U.S. District Judge Mariana R. Pfaelzer dismissed the complaint filed by the U.S. attorney’s office after Ferrante’s lawyers argued that the case against him violated the Constitution’s double jeopardy prohibition.

Her decision is thought to be the first to hold that a civil penalties action under a 1989 federal law is barred by earlier criminal proceedings, Ferrante’s lawyers said. The federal law restructured the S&L; industry and provided regulators and prosecutors with new powers to go after those believed to have caused the failures of financial institutions.

Ferrante, who owned Consolidated Savings Bank, was tried and acquitted two years ago on criminal conspiracy and fraud charges stemming from the 1986 failure of the savings and loan. During trial, prosecutors also dropped other charges because of a lack of evidence.

The civil penalties case, filed in June, was based on the same facts that were involved in the criminal proceeding, Ferrante’s lawyers argued. Therefore, they asserted, the civil case amounted to a punitive action that violated the Fifth Amendment’s protection against putting citizens in jeopardy twice for the same alleged wrongdoing. Pfaelzer agreed.

The action is the third time that the federal government has tried to build a case against Ferrante. In 1990, before the criminal charges were filed, Ferrante settled a civil lawsuit in which federal thrift regulators had alleged wrongdoing. His lawyers contend that the government settled because it had insufficient evidence against him.