Convictions Overturned, But Thrift’s Owner Worries About Reputation
CINCINNATI (AP) _ The owner of a savings and loan whose collapse sparked a statewide thrift crisis in 1985 said an appeals court vindicated him by overturning his criminal convictions stemming from the case.
But Marvin Warner said he remains concerned about his reputation. He said he felt like Raymond Donovan, the former Reagan administration labor secretary cleared by a New York jury in May 1987 of fraud and larceny charges.
″Donovan was found not guilty and he asked, ‘Which office do I go to to get my reputation back?’ That’s about the situation I’m in,″ the 70-year-old former owner of Home State Savings Bank and a former U.S. ambassador to Switzerland said from his Ocala, Fla., horse farm.
A three-judge panel of the 1st Ohio District Court of Appeals on Wednesday reversed the convictions of Warner and Home State’s former president, David Schiebel, on felony charges resulting from the March 1985 collapse of the Cincinnati-based thrift. State lawyers said they would appeal.
Former Home State depositors, cut off from their money for three months by the thrift’s failure, were outraged by the ruling.
″I can’t believe it. I was truly speechless,″ said Toni Handley of Cincinnati, a leader of the Home State Depositors Association that pressured state officials for help after the thrift’s collapse.
″I’m disgusted and disturbed,″ said Mark Stachler of Dayton, who had three accounts in Home State.
Prosecutors said they will ask the state Supreme Court to reinstate the convictions. Ohio Attorney General Anthony Celebrezze Jr. and Lawrence Kane Jr., special prosecutor for the case, said the ruling was on technicalities .
A Hamilton County Common Pleas Court jury convicted Warner and Schiebel in March 1987 on charges resulting from Home State’s collapse. Warner was sentenced to 3 1/2 years in prison. Schiebel, 58, was sentenced to six months. Both have been free on bond while appealing.
″I always knew I’d be vindicated,″ Schiebel said.
The appeals court reversed Warner’s and Schiebel’s convictions on three counts that alleged they covered up Home State’s precarious financial position in circulars distributed to raise money for the bank’s operations in 1984. That portion of the case was sent back to the lower court for a possible new trial.
The appeals court also ordered a lower court to dismiss Warner’s conviction on six counts that he oversaw unauthorized transfers of Home State money to a trading partner, ESM Government Securities Inc. of Fort Lauderdale, Fla. The court said the state did not present sufficient evidence.
R. Stan Mortenson, a lawyer for Warner, said Warner cannot be retried on those counts.
The appellate court also threw out the lower court’s order that Warner pay $22 million in restitution to Ohio and $250,000 in court costs, and that Schiebel pay $25,000 in court costs.
Home State collapsed four days after ESM was declared insolvent. The thrift lost $144 million through its securities transactions with ESM.
Celebrezze said Ohio has spent $5.6 million prosecuting the case and has made provisions to recover about $135 million as reimbursement for protecting Home State’s depositors.
Home State had about $1.4 billion in assets and served about 92,000 depositors in the Cincinnati, Columbus and Dayton areas. It was sold and reopened in June 1985.
Home State’s collapse caused a crisis for 69 other privately insured Ohio savings and loans institutions whose deposits were insured by the Ohio Deposit Guarantee Fund.
Gov. Richard Celeste temporarily closed the thrifts and ordered them to obtain federal deposit insurance or merge with companies that had it before reopening.
In October 1987, Warner filed for protection from creditors under federal bankruptcy law in Jacksonville, Fla., to halt $4 billion worth of claims against him.
U.S. Bankruptcy Judge George Proctor plans a hearing Sunday on Warner’s $16 million settlement with creditors. Ohio would receive $8 million under the agreement.