Former Lincoln Attorney Charged With Conspiracy
LOS ANGELES (AP) _ Prosecutors have filed a federal complaint contending that a former Lincoln Savings and Loan Association attorney conspired to hide unsound lending practices from federal examiners.
The complaint, filed late Friday, said Mark S. Sauter and officials of Lincoln and its parent, American Continental Corp., concealed ″by trick, scheme and device″ the fact that Lincoln had made loans without the review required of federally insured institutions.
Sauter, 37, was among the inner circle of financier Charles H. Keating Jr., former chairman of American Continental.
Efforts to reach Sauter on Saturday for comment were unsuccessful. He had no telephone number listed in Los Angeles or Irvine, where Lincoln Savings is based.
Sauter had daily contact with Keating who, although holding no official title at Irvine-based Lincoln, directed day-to-day operations of the thrift.
Government prosecutors allege that Sauter aided a team that was formed at Lincoln in early 1986 after the thrift learned federal examiners planned to examine the ways in which the thrift made loans.
The team created fraudulent documents for the thrift’s files ″to conceal from the examiners Lincoln’s unsafe and unsound underwriting practices and its failure to maintain records in compliance with federal regulations,″ said the U.S. District Court complaint.
Sauter was responsible for overseeing activities between Lincoln and federal regulatory agencies.
Federal regulators seized Lincoln in April 1989 after American Continental sought protection from creditors under federal bankruptcy laws.
Sauter is a defendant in a $1.1 billion civil racketeering suit filed by the government against Keating and other executives.
Federal officials have estimated the collapse of Lincoln may cost taxpayers $2 billion, making it the most expensive thrift bailout in U.S. history.