Former ESM Executives Sentenced in Ohio
CINCINNATI (AP) _ Two former executives of ESM Government Securities Inc., a Florida securities trader whose 1985 closing triggered an Ohio savings and loan industry crisis, were sentenced Wednesday to Ohio prison terms.
Charles Streicher, a former ESM vice president and director, and Thomas Saunders, an ex-ESM vice president and controller, were sentenced in Hamilton County Common Pleas Court for their guilty pleas to Ohio charges of grand theft. They were ordered to serve Ohio prison terms concurrent with federal prison sentences they are now serving.
Judge William Mathews accepted the recommendation of Ohio prosecutors to sentence Streicher to a four-year state prison term, concurrent to Streicher’s federal prison terms of eight and 10 years. The judge also accepted the state’s recommendation to sentence Saunders to a two-year Ohio prison term, concurrent with his federal prison sentence of three years.
The U.S. Securities and Exchange Commission closed ESM, of Fort Lauderdale, Fla., on March 4, 1985, for insolvency, when ESM had debts of more than $300 million.
Home State Savings Bank of Cincinnati, which was ESM’s biggest investor through securities transactions, lost $144 million because of ESM’s closing and itself collapsed four days later after a run on Home State’s accounts by panicked depositors. Home State’s failure triggered a statewide crisis in Ohio for 69 other privately insured savings and loan institutions, which were temporarily closed by Ohio until they could obtain federal deposit insurance.
Streicher and Saunders have already been sentenced to federal prison terms in connection with the investigations into ESM’s closing and Home State’s failure. Streicher is serving his term at a federal prison in Lexington, Ky., and Saunders is incarcerated at Eglin Air Force Base near Fort Walton, Fla.
Lawrence Kane Jr., Ohio’s special prosecutor in the Home State case, said Streicher and Saunders pleaded guilty to criminal information documents that charged them with grand theft through ESM’s dealings with Home State. Authorities allege that some ESM and Home State executives collaborated to ensure a continued flow of Home State investments to prop up the financially struggling ESM.
Kane said Saunders and Streicher are the last remaining ESM principals to be sentenced in Ohio. Kane said both men could wind up serving some time in Ohio prison if they are released early enough from federal prison.
Saunders and Streicher cooperated with state investigators, and prosecutors took that into account in making their sentencing recommendations, Kane said.