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Charles Keating Dies: Face of 1980s Savings-and-Loan Crisis Was 90

Image: Charles Keating Dies: Face of 1980s Savings-and-Loan Crisis Was 90

Wednesday, 02 Apr 2014 10:26 AM

By Clyde Hughes

Charles H. Keating, who became the face of the $150 billion 1980s savings-and-loan crisis that led him to prison, has died. He was 90.

Keating was convicted of fraud, racketeering and conspiracy in state and federal trials. He went to prison for four and a half years in connection to the savings and loan scandal, in which he fleeced thousands of depositors with regulatory help from a group of United States senators known as the Keating Five, the New York Times reported. 

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Keating looted the accounts of thousands of his Lincoln Savings & Loan customers in Irvine, Calif., eventually costing the government $3.1 billion, according to the Los Angeles Times. 

His verdicts were overturned on appeals in 1996, and California dropped the case just before a federal retrial in 1999. Keating pled guilty to four counts of wire and bankruptcy fraud and was sentenced to time he had already served.

He was then accused of asking U.S. Senators Alan Cranston of California, Donald W. Riegle Jr. of Michigan, John Glenn of Ohio and Dennis DeConcini and John McCain of Arizona, to pressure the Federal Home Loan Bank Board to relax its rules and kill its investigation, according to The New York Times.

The senators became known in the media as the Keating Five.

The Senate Ethics Committee ruled in 1991 that none of the senators broke any laws; however, Cranston, DeConcini and Riegle interfered with the bank board's inquiry and were rebuked. The Times reported that Glenn and McCain were cleared but were criticized for using "poor judgment."

Many of those who invested with Lincoln were older Californians who collectively bought $265 million worth of uninsured American Continental junk bonds.

"He took their life savings and spent them on mansions, pleasure boats, private airports, indulgences of virtually every whim he and his family had," Alice Hill, a federal prosecutor in the Keating case, said at the time.

Keating had been working as an occasional real estate consultant and living a low key life in Phoenix before his death.

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