As the body of Duayne D. Christensen, late owner of North America Savings & Loan Assn., was buried at a Newport Beach cemetery Wednesday, a state agency that took over the institution Friday confirmed that it had accused him of falsifying records, forging signatures and making questionable payments of more than $4 million to himself and a woman friend.
William J. Crawford, commissioner for the state Department of Savings and Loan, said the agency made the claims in court papers filed to support the conservatorship it imposed on the Santa Ana institution, which had assets of $219 million at the end of November.
The court record was sealed from public view Tuesday by Orange County Presiding Superior Court Judge Harmon G. Scoville, who upheld the conservatorship, but information in the documents was obtained before his order took effect.
Crawford said the court papers show that Christensen had used a fraudulent $2.7-million certificate of deposit at his S&L to borrow more than $2 million from the Costa Mesa branch of Imperial Bank.
Payments to Friend
Christensen also had North America Savings pay a close friend, Janet McKinzie, $434,000 for consulting expenses and $1.75 million for an advance commission with little or no documentation on the work, Crawford said. McKinzie could not be reached Wednesday.
Crawford also confirmed that his agency found a fraudulent $1.4-million certificate for stock in the S&L that was issued to relatives of McKinzie. The stock certificate was used as collateral in obtaining a loan from First Interstate Bank of Alaska, Crawford said.
A written court statement by Brooks A. Miller, president of North America Savings, charges that his signature on the stock certificate was forged, Crawford said. Examiners also could not find any payment record for the shares.
From the time he took office nearly two years ago, Crawford said, he has been arguing with Christensen over a major asset claimed by the S&L.
That asset, according to court papers, is a luxury, 20-unit condominium in the Lake Tahoe area that the S&L said was worth $20 million but which state regulators valued at little more than $2 million. The argument turned on how to value the property, which was used as a time-share condominium in which a number of buyers purchased shares for use of the facilities at specified time periods each year.
The condominium recently was sold, but the purchasers reportedly defaulted on a $23.2-million note last month, and North America Savings foreclosed on the property.
Died in Accident
Christensen, a dentist who lived in Newport Beach and worked in Westminster, died early Friday in a one-car accident when his Jaguar missed a curve on the Corona del Mar Freeway and crashed into an abutment.
Crawford had said Friday and again Tuesday that his department had ordered Christensen to come up with $7 million in additional capital. On Wednesday, Crawford changed the figure to $6 million.
North America Savings had lost $8.9 million in the first 11 months last year, and its net worth had plunged to a negative $1.5 million at the end of November. Crawford confirmed that examiners since have determined that the fraudulent certificate of deposit and stock certificate, plus $1 million in real estate losses, pushed the association's total negative net worth to $6.5 million.