Faulkner, Others Appear Before Judge in Indictments
DALLAS (AP) _ Six people, including a multimillionaire developer, pleaded innocent Wednesday before a federal judge in connection with an alleged conspiracy to defraud five savings and loan associations in two states through a network of fraudulent land and construction loans.
D.L. ″Danny″ Faulkner, well known for his political connections and flamboyant lifestyle, was arraigned with the five others before U.S. District Judge Joe Fish.
Faulkner was among seven men indicted last week by a federal grand jury on charges of conspiracy and fraud in the widespread investigation of savings and loan assocations in Texas and Arkansas.
Prosecutors said the investigation uncovered a series of ″land flips″ that put millions of dollars in the pockets of defendants.
The 88-count indictment alleged fraud, conspiracy and racketeering in a $500 million plot to defraud five savings and loans associations through a network of fraudulent land and construction loans, primarily for a string of condominium developments near Lake Ray Hubbard in Garland.
James L. Toler, a former Garland mayor, also appeared before Fish. Also arraigned were Spencer H. Blain Jr., 51, of Dallas, former chairman of Empire Savings; and Kenneth Earl Cansler, 40, a real estate salesman.
Paul Arlin Jensen, 38, of Ogden, Utah, a former mortgage broker and later chairman of Lancaster First Federal Savings and Loan was also indicted. But Jensen did not appear before Fish on Wednesday.
The judge said Jensen had a scheduling conflict and would appear before him in the next week or two.
Indicted for conspiracy, but not included in the racketeering charge, were real estate appraisers Arthur G. Formann, 58, and Paul D. Tannehill, 39. Both were arraigned before Fish.
All six defendants appearing Wednesday were released on personal recognizance bonds and left the courtroom without comment. Fish said a trial was tentatively scheduled for Dec. 14. The judge also called a scheduling conference for 3 p.m. Friday in his court in connection with the case.
Federal prosecutors had earlier described Faulkner and Toler as ringleaders of the scheme. Grand jurors alleged that Toler may have reaped $38 million from the plan.
Faulkner, 54, was estimated by grand jurors to have netted at least $40 million in the scheme. He faces up to 346 years in prison and $297,000 in fines if convicted.