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Keating, in Prison Over Passport, Fights for Release

TIMES STAFF WRITER

In another turn of events for Charles H. Keating Jr., the former Lincoln Savings & Loan operator is fighting to get out of prison again, this time after he allegedly violated bail conditions by seeking a passport.

The former Arizona developer, whose Irvine thrift crashed nine years ago in a heap of bad loans, speculative deals and what authorities charge was outright fraud, asked Monday that his $300,000 bond--and his freedom--be reinstated.

U.S. District Judge Mariana R. Pfaelzer, who issued the bench warrant last week for his arrest, scheduled a court session Wednesday afternoon. Federal authorities will transfer Keating from a prison outside Phoenix, his home, to her courtroom in Los Angeles.

Keating is awaiting the outcome of an appeal filed by federal prosecutors after Pfaelzer threw out a 73-count racketeering, conspiracy and fraud conviction because of jury misconduct.

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While the case is pending, he must abide by bail conditions to remain free. The first condition is that he surrender all passports “and not apply for the issuance of a passport.”

Keating can’t even set foot inside an airport or seaport with international connections without court approval. He can travel only within Arizona and to California and Illinois, where his lawyers are based.

But, a month ago, his chief attorney, Stephen C. Neal, said he began talking with federal prosecutors about allowing his client to go to Belize in Central America to consult with business executives there about a proposed resort hotel.

Prosecutors decided they didn’t want Keating going to Belize, said Neal, who told them that he would start the passport application process and then seek court approval for a trip. Neal said he offered to surrender the passport to authorities.

“I told them I may want to ask the court for permission to travel to Belize or elsewhere at a later date,” said Neal, who figured it would be better for Keating to have the passport ready at the time he sought court permission.

When prosecutors objected to the idea of a new passport, Neal said he pulled the application back.

Federal prosecutors won’t discuss the facts leading up to arrest, but they “did not consent to Mr. Keating obtaining a passport or to travel abroad,” said Thom Mrozek, a spokesman for the U.S. attorney’s office in Los Angeles.

He pointed out that Keating has sought and won approval to travel to other states, particularly New York.

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The impetus for the bench warrant apparently stemmed from a report filed with Pfaelzer by U.S. Pretrial Services, which monitors defendants on bail and routinely reports activities to the judges. It’s unclear whether Pfaelzer issued the bench warrant on her own or whether Pretrial Services sought it.

Pfaelzer has been annoyed with Keating’s arguments about jury misconduct at his 1992 trial. She reluctantly agreed to grant him a new trial only after a federal appeals panel ordered her to hold a hearing on the matter.

She also released Keating on bail from federal prison, where he served fewer than five years of a 12-year, 7-month sentence.


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