Keating Lawyer Asks Judge to Overturn State Conviction

A lawyer for former Lincoln Savings & Loan operator Charles H. Keating Jr. asked a federal judge Monday to overturn his client’s 17-count fraud conviction in state court.

Stephen C. Neal argued that jury instructions improperly allowed for a conviction on grounds that Keating was a direct perpetrator in defrauding small investors, mainly elderly Southern Californians. Deputy State Atty. Gen. Sanjay T. Kumar argued that the evidence pointed not to direct involvement but only to Keating’s aiding and abetting the fraud, and that the jury received a special instruction on that issue.

Keating was sent to prison for 10 years after a jury convicted him in December 1991 for his role in selling risky bonds in the Irvine thrift’s parent company, American Continental Corp. The bonds became worthless after Keating’s empire collapsed in 1989. State appeals courts have upheld his state conviction.

U.S. District Judge John Davies said he would issue a ruling soon. Keating also is serving 12 years, seven months for federal racketeering, fraud and conspiracy convictions stemming from his actions as American Continental’s chairman.