Charles Keating Jr.'s son-in-law and three other former executives of Lincoln Savings and Loan settled civil charges in the nation's most notorious thrift collapse by agreeing to a record $75 million restitution order.
The settlement, announced Tuesday by the Office of Thrift Supervision, is the largest ever obtained from individuals, according to the agency. But much of it probably will remain unpaid.Son-in-law Robert M. Wurzelbacher, who was senior vice president of Lincoln's Phoenix-based parent company, American Continental Corp., says he is broke. So does Judy J. Wischer, former president of American Continental.
Under the settlement's terms, Wurzelbacher owes $30 million and Wischer, $25 million. Lincoln's former president, Robert J. Hubbard Jr., and the S&L's former chairman, Andre A. Niebling, owe $15 million and $5 million respectively.
Wurzelbacher is turning over to the government $133,000 from the sale of a vacation home in Michigan.
A thrift office attorney, who spoke on condition of anonymity, said insurance should provide around $10 million. Any restitution collected will go to the Resolution Trust Corp. to offset taxpayers' estimated $2.5 billion cost of protecting depositors in Irvine, Calif.-based Lincoln.
The four former executives also accepted lifetime bans from the banking industry and limits on their ability to borrow from federally insured institutions. They agreed to cooperate with regulators by testifying in related cases.
The OTS cases against Keating; his son, Charles H. Keating III, and American Continental director Robert J. Kielty remain open.
Keating, 68, was convicted of California state charges of swindling investors, and is serving a 10-year prison sentence. He still faces trial, starting Oct. 10, on federal charges.