Prosecutor: Keating Never Revealed Troubles of His Financial Empire
E. SCOTT RECKARD
Nov. 14, 1991
LOS ANGELES (AP) _ Charles Keating Jr. never adequately revealed the troubles of his financial empire to investors who purchased high-risk junk bonds issued by his company, a prosecutor said today in closing arguments.
''I submit to you that the heart and soul of this case is about truth. And it's about victimized bond purchasers ... who did not get the truth,'' said Deputy District Attorney William Hodgman, back in court after a two-day illness.
Hodgman said the investors would not have purchased the bonds had they known of the many problems of Lincoln Savings and of the severity of the warnings that regulators were giving Keating about his tottering thrift.
Who should bear the blame? Hodgman asked rhetorically. ''That man is the defendant, Charles Keating,'' he said, gesturing across the courtroom at Keating.
Hodgman reminded the jury of the investors who testified in the case, noting that one, Bertha Rettig, purchased her bonds in February 1988 just four days before the bond sales program was discontinued and two months before Lincoln was seized.
''She believed that when she bought that bond that it was a safe investment. What she didn't know was that she never got the truth, the whole truth and nothing but the truth,'' Hodgman said.
Keating strode confidently into court today before Hodgman began giving his closing arguments.
A small smile creased Keating's lean face as he walked past reporters without speaking a word. Bradley Boland, Keating's son-in-law, said the former Lincoln Savings chief felt confident.
''He's fired up,'' Boland said. ''He's ready to go.''
Keating and his attorney, Stephen Neal, were expected to sit by all day today as Hodgman gave his closing argument in the first criminal prosecution stemming from the collapse of Lincoln Savings.
Superior Court Judge Lance A. Ito said he expected Neal's reply, a final rebuttal by Hodgman and jury instructions on Friday.
The final arguments had been scheduled to begin Tuesday but Hodgman took ill.
Keating, 67, is charged with 18 counts of securities fraud. If convicted of six or more counts, he could be sentenced to 10 years in prison. Testimony in the trial has taken two months.
Neal contends Keating never intended to dupe the investors, mainly depositors who wound up with higher-interest junk bonds instead of the insured certificates of deposits they'd bought before at branches of Irvine-based Lincoln.