Authorities to Press Hunt for Keating Assets : S&L; collapse: Prosecutors say they will seek a forfeiture judgment, which would assist in their search, against the convicted looter of Lincoln Savings.

By JAMES S. GRANELLI

Jan. 9, 1993 12 AM PT

TIMES STAFF WRITER

With Charles H. Keating Jr. convicted of racketeering, federal authorities will renew their effort to find some of the millions of dollars that he looted from Lincoln Savings & Loan.

Federal prosecutors won’t say if they already have found assets that Keating might have hid in the United States or overseas, but they say they can search more quickly, more thoroughly and more inexpensively than others could.

On Wednesday, a federal jury convicted Keating and his son of racketeering, conspiracy and fraud. The racketeering conviction empowers prosecutors to put Keating through a civil hearing in their effort to forfeit any bank accounts, real estate or other assets he may have.

A forfeiture judgment would give prosecutors new avenues to pursue in their effort to recoup losses at Lincoln and its parent company, American Continental Corp. Prosecutors would, for instance, have a right to quiz third parties under oath about the location of any assets.

No date for the forfeiture hearing has yet been set by U.S. District Judge Mariana R. Pfaelzer.

Federal authorities have long believed that Keating has stashed away some of his ill-gotten gains, probably converting cash to other assets and putting them in the names of family members or friends.

“It’s unlikely there will be a large recovery,” said U.S. Atty. Terree A. Bowers in Los Angeles. “But if we’re fortunate, we’ll recover some amount.”

Keating, whose company owned the Irvine-based thrift, has for three years maintained that he is broke, and neither private nor federal investigators have been able to find any hidden funds.

In a late 1991 order freezing his assets, Keating listed little more than furniture, clothing, jewelry, personal cars, bank accounts and property in Canada. There was little or no money in the bank accounts, and Keating and his wife are entitled to use their assets to pay for “reasonable and ordinary” expenses.

“We may be lucky to get $100,000” from known assets, said Assistant U.S. Atty. Eric Honig, who will be spearheading the effort to find and seize Keating’s assets.

Lincoln’s failure is the nation’s costliest, leaving taxpayers with a $2.6-billion cleanup bill. Small investors in American Continental lost more than $285 million.

With a judgment of forfeiture, the federal government can begin its formal search for any Keating assets. And the government will likely have more time and money to pursue a search than would the small investors, mainly bondholders, who hold a $1.5-billion judgment against Keating.

“What the federal government has that the bondholders don’t have is an embassy in every country in the world and lawyers there and unlimited money,” said G. Robert Blakey, the University of Notre Dame criminal law professor who co-wrote a federal racketeering law.

“When an ambassador walks into a foreign country and asks for help, that’s not your average person,” Blakey said. Attorneys for bondholders are “very able,” he said, “but they can’t send in the Marines.”

Neither can the government, say Bowers and Honig.

“I can say safely now that, other than things named in our restraining (asset freeze) order, there’s nothing we know of that’s in his name,” Honig said. “There are other things we’re looking at, and we will leave no stone unturned.”