Judge Freezes Assets of Former Anaheim Banker

A federal judge presiding over a government lawsuit against former Anaheim banker Gerald J. Garner and his wife, Joan, has frozen their assets after finding “substantial reason to believe” that they are trying to hide or dispose of their holdings.

U.S. District Judge George H. King said in his written order that the asset freeze also was warranted because regulators are “likely to prevail” in their $10-million lawsuit against the Newport Beach couple and others over the 1993 failure of American Commerce National Bank.

King limited Gerald Garner, the bank’s former chairman, and Joan G. Garner, a former director, to a total of $6,000 a month in living expenses plus $5,000 a month for legal fees. The judge filed his order Oct. 29, but lawyers said they didn’t learn about it until Friday. The freeze does not affect others named in the suit.

Garner, a disbarred New York lawyer who is representing himself, is chairman of Coast Plaza Doctors Hospital in Norwalk and operates several other businesses. He was not available for comment Monday. His wife couldn’t be reached for comment.

The bank’s failure drew attention because it was the first time regulators had used a 1991 law allowing them to seize a healthy institution. The FBI also is conducting an investigation into possible bank fraud and embezzlement.

The Garners have denied any wrongdoing.

The Federal Deposit Insurance Corp., which filed its lawsuit in April against the Garners and other directors and officers, alleged in court papers that some of their assets apparently were transferred into family trusts and Garner-related companies.

The lawsuit was filed against the Garners, five other directors and former bank executive Daniel Garner, one of Gerald Garner’s brothers. The FDIC has a separate lawsuit pending against Gerald and Joan Garner to collect $3.7 million in loans the bank made to them and their companies when Gerald Garner headed the bank.

Early this year, Garner agreed to a lifetime industry ban and a $167,000 fine to settle accusations by the Office of the Comptroller of the Currency, which regulates national banks, that he lied about his bank’s condition and misappropriated funds.

Garner had battled with the comptroller’s office through the nine years that American Commerce existed.

In seizing the bank, the agency issued an unusually strong statement saying that federal examiners never really knew the condition of the bank because Garner lied to them, concealed records and wasted the bank’s assets. Insider abuses were so pervasive, the agency said, that it no longer could trust Garner or his “weak, abusive and self-serving” officers and directors.

Garner denied that he intentionally violated any laws, and described any violations as “technical.”