Magazine article American Banker

Former Execs of Failed Thrift in Texas, Illinois Indicted for Fraud

Magazine article American Banker

Former Execs of Failed Thrift in Texas, Illinois Indicted for Fraud

Article excerpt

Fallout from the 1980s' thrift debacle continued last week as the Justice Department indicted two former executives of small, now-defunct savings and loans.

More than six years after their institutions failed, the executives were accused of frauds that allegedly cost their institutions hundreds of thousands of dollars.

The U.S. Attorney for the Northern District of Illinois filed indictments against John R. O'Connell of Florida and E.M. Huitt Jr. of Texas.

Mr. O'Connell, 70, is the former president and chairman of Skokie (Ill.) Federal Savings and Loan Association, which he founded and which failed in 1989.

The Office of Thrift Supervision last year banned him and former Skokie Federal president James W. Peters from working for any insured depository institution.

Mr. Huitt, 59, is the former chairman and president of Bay City (Tex.) Federal Savings and Loan Association, which failed in 1988.

The two were charged with involvement in three related fraud schemes during the '80s in which they and other S&L executives allegedly did each other favors that damaged their institutions or deceived regulators about their financial condition, the Justice Department said.

Mr. Huitt planned to plead not guilty at his arraignment this week, said his attorney, David Gerger, of the Houston law firm Foreman DeGeurin & Nugent.

"Mr. Huitt didn't do anything wrong, and we look forward to defending and vindicating him," Mr. Gerger said.

Mr. O'Connell lives in Florida and is too ill to enter a plea in Illinois this week, said his attorney, David Schippers, of the Chicago law firm Schippers, Gilbert & Bailey.

Mr. Schippers said he would ask for O'Connell's arraignment to be continued for a month. "His plea will definitely be 'not guilty,'" the lawyer said.

Mr. O'Connell and Mr. Huitt are each charged with one count of conspiracy, one count of mail fraud, and two counts of wire fraud. …

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