An 80-year-old retiree testifying in the trial of dethroned thrift mogul
Charles Keating Jr. said he lost $101,000 after buying an uninsured junk bond at Lincoln Savings and Loan from a salesman who deceived him."He (the salesman) said, `It is insured; we are Lincoln Savings and we are insured,' " said Leon Bonan, the first of an expected 74 witnesses to testify in the securities fraud trial of Keating, the former owner of Lincoln.
Bonan also said none of the sales staff at the Lincoln branch in the Sherman Oaks area of Los Angeles made any mention that the bonds were risky or that Lincoln was in financial trouble when Bonan bought the bond on April 9, 1987.
The witness also said he assumed that Lincoln was in good financial shape because of a glossy color brochure featuring some of its properties.
The prosecution is expected to call 21 other investors to testify they were duped into buying the bonds sold through branch offices of a federally insured S&L, believing the investments were also covered by insurance.