S L Defendants Fail to Pay Millions in Restitution

By Keil, Richard | THE JOURNAL RECORD, February 25, 1993 | Go to article overview

S L Defendants Fail to Pay Millions in Restitution


Keil, Richard, THE JOURNAL RECORD


By Richard Keil

Associated Press

WASHINGTON _ More than 100 savings and loan defendants who escaped long prison terms in exchange for making penalty payments have repaid less than a halfpenny per dollar of the $133.8 million they owe, according to an Associated Press review of federal court records.

Some defendants _ and some government officials, too _ readily acknowledge there is little chance the 109 convicted S L figures who received plea bargains will ever repay the huge fines and restitutions.

"The restitution orders in these cases are thrown around like there are nickels and dimes involved," said Woodrow Brownlee, former president of Dallas-based Commodore Savings Association. He has repaid just $3,000 of the $1 million in restitution ordered in a plea bargain that spared him any prison time.

When asked about his slow repayment, Brownlee, who earns about $15,000 per year in commissions from a sales job, pounded on his calculator.

"Let's see _ I'm 53, and let's say I have a life expectancy of 75 years. That works out to $47,500 per year," Brownlee said.

Though prosecutors can try to revoke probation for defendants who fail to pay up, the Justice Department has forgone a get-tough approach and left it instead to overburdened probation and parole officers to collect the money.

George Calhoun, a senior Justice Department prosecutor, said an aggressive approach would do little because "in a good number of the cases. . .they've pretty well been stripped clean by the time they get to court."

Attorney Christopher Cannon, who represented the head of a San Francisco thrift convicted of misusing funds in 1990, said the fines are "unenforceable" and "do nothing more than give the appearance of government action."

Cannon's client, Ted Musacchio, was given five years' probation and ordered to pay $9.3 million in restitution to his former thrift. Musacchio paid less than $1,000 before dying of cancer last month.

"He had zero assets, and everybody knew at the time of sentencing that he had no assets," Cannon said.

A Justice Department document obtained by The AP shows Musacchio and Brownlee are far from alone.

Overall, the government has recovered just 4.5 percent of the $846.7 million in fines and restitution orders assessed in the 2,603 S L criminal cases from October 1988 through the end of 1992, according to the General Accounting Office, the investigatory arm of Congress.

And the recovery rate for defendants involved in plea bargains is a minuscule 0.43 percent, $577,540 of $133.8 million, the AP analysis of the Justice document showed.

More than two dozen plea bargain defendants listed in the Justice report escaped without any prison time at all and those who did serve time spent fewer months behind bars on average than car thieves, the AP review also found.

The average prison term for an S L convict is 21 months while the average car thief convicted in federal court spends 28 months behind bars.

A sampling of the defendants who have yet to make good: Morris John McCleary, former head of Home Plan Savings and Loan Association in Iowa who admitted stealing nearly $2 million from his thrift, has been paying just $30 a month toward the $1. …

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