More Charges Dismissed in Spiegel Case

In another setback for prosecutors, a federal judge dismissed a second set of criminal charges against Thomas Spiegel, the former head of Columbia Savings & Loan now on trial in Los Angeles on allegations that he looted the failed thrift.

On a motion by Spiegel’s defense team, U.S. District Judge Robert M. Takasugi on Monday threw out eight felony counts charging Spiegel with illegally converting to his own use a $1-million condominium in Indian Wells, Calif., that had been bought and lavishly furnished with Columbia’s funds.

In dismissing those charges, Takasugi said the evidence showed that Spiegel was a “workaholic” who used the condominium “for business-related purposes 95% to 100% of the time.” Because Spiegel was under contract seven days a week, the presence of his wife and family at the condominium some of the time did not change its business-related nature, the judge said.

“It’s rather curious that we did not have one witness testify that Mr. Spiegel even dipped his toe in the pool,” Takasugi wrote in his ruling.

Of the four sets of criminal charges brought against Spiegel in June, 1992, two sets--a total of 29 counts--remain. On Nov. 17, prosecutors themselves recommended dropping nine counts related to Spiegel’s alleged scheme to use improper loans from Columbia to obtain a 50% interest in a Santa Barbara luxury car dealership.

The remaining counts accuse Spiegel of improperly benefiting from some Columbia business deals and of enhancing his gun collection with thousands of dollars’ worth of firearms bought by the thrift.

Columbia had been one of the leading buyers of junk bonds issued by former Drexel Burnham Lambert finance wizard Michael Milken. But beginning in 1989, the junk-bond market collapsed, which helped precipitate Columbia’s seizure by federal regulators in 1991, at an estimated cost to taxpayers of $1.2 billion. Spiegel had been forced to resign on Dec. 31, 1989.