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U.S. Grand Jury Indicts Ex-President of Defunct Bank

June 11, 1986|JANE APPLEGATE | Times Staff Writer

LOS ANGELES — The former president of what was once Orange County's fastest-growing bank was indicted Tuesday by a federal grand jury.

John G. Willett, 39, of Fullerton was formerly president of Western National Bank in Santa Ana. The bank was declared insolvent and shut down by federal regulators in August, 1982. The indictment charges Willett with one count of misapplication of funds, one count of accepting a kickback on a loan and two counts of false entry in bank records.

The charges are based on a $50,000 loan allegedly made by Willett in June, 1981, to a defunct real estate development company called S. J. G. Properties Inc. Willett allegedly accepted a $25,000 kickback for making the loan, the indictment said.

One of Bank's Founders

Willett, who was one of the bank's founders, could not be reached for comment Tuesday.

"We haven't seen the indictment, but on the transaction, Mr. Willett denies any wrongdoing," said Los Angeles attorney Michael L. Kadish.

Willett plans to surrender to federal authorities within the next few days, according to Assistant U.S. Atty. Patricia Collins. She said that Willett's indictment stemmed from an FBI investigation that began when the bank was declared insolvent and closed.

In 1981 and 1982, Western National was one of Orange County's fastest-growing banks. In its first six months of operation, Western National accumulated $22 million in assets, nearly 10 times its initial capitalization of $2.5 million, according to bank records.

However, after a nine-month investigation, federal regulators declared Western National insolvent. At the time, they said Western National suffered from "significant loan losses."

Willett frequently clashed with other board members and was fired in December, 1982.

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