Former Hill Financial President Pleads Guilty
PHILADELPHIA (AP) _ A former savings and loan association officer pleaded guilty today to federal charges he granted more than $220 million in unsound loans that led to one of the nation’s largest S&L collapses.
Alfred J. Lutz Jr., 57, of Bala Cynwyd pleaded guilty to three counts of misapplication of bank funds by a bank officer, a charge that means a loan officer knowingly grants a loan on inadequate or worthless collateral.
Lutz faces up to 15 years in prison, five years’ probation, a $750,000 fine when sentenced and could be ordered to pay restitution. Lutz is the former president and chief executive officer of Hill Financial Savings Association of Red Hill, Montgomery County, a suburb of Philadelphia.
Assistant U.S. Attorney Amy L. Kurland said the government will seek to reduce Hill’s sentence if Lutz cooperates with prosecutors in the investigation of another person, whom she did not identify.
U.S. District Judge Ronald L. Buckwalter accepted the guilty plea, scheduled sentencing for Jan. 22 and released Lutz on his own recognizance. Ms. Kurland said the government probably would ask for a postponement.
Lutz, a father of eight and former Navy lieutenant commander, did not speak to reporters as he left the courtroom. ″We have no comment,″ said his attorney, Robert A. McAteer.
The failure of Hill Financial in August 1989 cost taxpayers $1.4 billion.
Lutz pleaded guilty in connection with loans of about $100 million to Denver developer Richard H. Rossmiller and related companies. The plea also concerned $80 million in loans to Allan Reiver and related interests for a proposed business complex and $42 million to W.R. Nelson and W. Bruce Nelson of Houston and related interests. The government said in a memorandum the loans to the Nelsons were to conceal Hill’s non-performing loans in Texas.