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Former Thrift President Pleads Guilty to Federal Charges

April 27, 1987

CINCINNATI (AP) _ Burton M. Bongard, former president of Home State Savings Bank, pleaded guilty Monday to four federal counts stemming from the 1985 collapse of the savings and loan.

In a statement to visiting U.S. District Judge Charles Joiner, Bongard said he and former Home State owner Marvin L. Warner ″conspired...to transfer funds from Home State for personal profit.″

Bongard, 46, already has been convicted on 82 state counts stemming from Home State’s collapse. He pleaded guilty Monday to one count of conspiracy and three counts of wire fraud in federal court. The charges carry a maximum sentence of 20 years in prison and a $253,000 fine.

The government dropped 12 other counts against Bongard.

Joiner ordered a pre-sentence investigation. No sentencing date was set.

Bongard and Warner, a former U.S. diplomat, were scheduled for trial in May on the federal charges. Warner now will be tried alone, and federal prosecutors say Bongard has agreed to testify against him.

Although Bongard originally had pleaded innocent to the state charges, his attorney, Marvin Gersten, denied Bongard had changed his story.

″He told the truth then. Now he wants to tell his side of the story. It was his idea to make a statement to the federal prosecutors,″ Gersten said.

″I conspired with Marvin L. Warner to transfer funds from Home State to ESM for personal profit,″ Bongard said. ″In addition, I and Marvin Warner received profits in our personal accounts after transferring the funds to ESM, putting the depositors’ funds at risk.″

Warner, 67, is charged in the federal indictment with conspiracy, 15 counts of wire fraud and two counts of interstate movement of fradulently obtained funds. He has pleaded innocent.

The charges arise from Home State’s business deals with ESM Government Securities Inc., of Fort Lauderdale, Fla. ESM was closed March 4, 1985, touching off depositor runs that resulted in Homes State’s collapse four days later. The government estimates Home State lost $144 million in its ESM deals.

Home State’s collapse triggered a crisis among Ohio’s privately insured savings and loans, prompting Gov. Richard Celeste to temporarily close 69 thrfits until they obtained federal deposit insurance.

The federal indictment accused Bongard of one count of conspiracy, 13 counts of wire fraud and two counts of interstate movement of fradulently obtained money.

Warner’s attorney, William Jeffress, could not be reached for comment Monday. Earlier, Jeffress said he was not surprised by the plea agreement.

U.S. Attorney D. Michael Crites welcomed Bongard’s testimony but said it was not crucial to the government’s case.

Warner, a former U.S. ambassador to Switzerland under President Carter, was convicted of six counts of unauthorized use of funds and three securities violations in the state trial. He was sentenced to 3 1/2 years in prison and ordered to make $22 million in restitution.

Bongard was sentenced to 10 years in prison and ordered to make $114 million in restitution on his state convictions.

Former Home State president David Schiebel was convicted of three securities violations and sentenced to six months in prison and ordered to make $25,000 restitution.

All three defendants have appealed.