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JUDGE REFUSES TO FREE KEATING BEFORE HEARING

SHARE JUDGE REFUSES TO FREE KEATING BEFORE HEARING

A federal judge refused to release financier Charles Keating Jr. from prison or reinstate bail before a hearing next month on whether jury misconduct improperly led to his 1993 conviction.

U.S. District Judge Mariana Pfaelzer on Monday scheduled the hearing for early September and asked lawyers to list for her the issues they believe should be raised in questioning the jurors who deliberated the federal case. The judge had been ordered to set the hearing by an appeals court.She said Keating could ask for bail again after the hearing, which could lead to reversal of the federal convictions and a new trial.

Keating, former Lincoln Savings boss, was the most notorious figure of the 1980s savings and loan debacle, known for his huge salaries and lavish life.

The 1989 collapse of Keating's empire left junk bonds issued by his Phoenix-based American Continental Corp., which owned Irvine-based Lincoln, worthless. The cost to taxpayers was $3.4 billion. Bondholders of American Continental, many of them elderly depositors who had invested their life savings, lost $265 million.

In the federal case, Keating was convicted in 1993 of 73 charges of fraud, conspiracy and racketeering, based on allegations that he looted Lincoln and defrauded American Continental bondholders. He was sentenced to 121/2 years in federal prison and is scheduled to be released in 2001.