Keating Denied Bail Pending Hearing on Conviction

Convicted savings and loan swindler Charles H. Keating Jr. will remain in prison--at least for now--pending a hearing on whether he should be granted a new federal trial because of alleged jury misconduct.

U.S. District Judge Mariana Pfaelzer listened to attorneys’ arguments for more than an hour before denying bail to Keating, despite two recent court rulings favorable to the former head of Lincoln Savings & Loan.

Keating is serving a 12 1/2-year sentence in a federal lockup in Tucson for fraud and racketeering in connection with the 1989 collapse of the Irvine-based thrift. Last month, a federal appeals court ordered a hearing into whether possible jury misconduct may have played a role in that conviction.

In April, a federal judge threw out Keating’s 1991 state fraud conviction, citing flawed legal theories and improper jury instructions.

Pfaelzer on Monday ordered prosecutors and defense attorneys to submit briefs to the court on Aug. 26 outlining the issues that should be raised in questioning jurors on the federal case about their knowledge of Keating’s previous state conviction. Pfaelzer said she would review Keating’s bail request again at that time and set a date for the hearing soon after.

In trying to secure Keating’s release on his own recognizance, Keating’s attorneys had argued that the well-known financier posed no risk of fleeing and that he will probably succeed in his bid for a new trial--issues critical in a judge’s decision to grant bail.

“Nobody should by rotting away in prison while his appellate issues are hashed out unless he is a threat to society, which Mr. Keating is not, or a flight risk, which he is not,” said Keating attorney Stephen Neal outside the courtroom.

Associated Press contributed to this report.