A federal judge Thursday sentenced Charles Keating III - son of notorious S&L swindler Charles Keating Jr. - to eight years and one month in prison for his part in the Lincoln Savings & Loan collapse.
Judge Mariana Pfaelzer followed the recommendation of prosecutors in assigning the 97-month sentence to the younger Keating, rejecting arguments his father had manipulated him in the affair."The court has considered that he was dominated by his father," Pfaelzer said. But the judge - who sentenced the elder Keating earlier this month to 12 years and seven months in prison - said the younger Keating seemed intelligent enough to know he had been breaking the law.
"He (Keating III) reaped substantial benefits, such as salary and travel," Pfaelzer said.
In a recently published book, "Trust Me: Charles Keating and the Missing Billions," authors Michael Binstein and Charles Bowden argued the younger Keating mostly just signed documents on orders from his domineering father.
But Pfaelzer, who had ordered the elder Keating to pay $122.4 million in restitution, Thursday had the younger Keating immediately placed in custody, requiring him to pay some $97 million in penalties.
Yet although the elder Keating once had a net worth of more than $40 million, he and his son now claim the Lincoln collapse left them broke.
In January, a federal jury convicted the younger Keating on 64 felony counts of racketeering, bank fraud, securities fraud, and conspiracy.
The same panel also convicted his his father on 73 counts stemming from Lincoln's collapse, which left U.S. taxpayers stuck with a record $2.6 billion in losses.
Prosecutors said the Keatings used phony buyers of raw land in Arizona to post bogus profits, then fooled outside auditors about the deals.
But defense lawyers argued the deals had been both sound and legitimate at the time the Keatings completed them - noting the transactions collapsed only after the government seized Lincoln in 1989.
Earlier this week, Pfaelzer ordered the elder Keating to forfeit $265 million he made through fraudulent land sales and bond schemes.