A U.S. District Court judge Monday rejected a bid by John L. Molinaro, former owner of Ramona Savings & Loan Assn. in Orange, to halt pretrial proceedings in a $25-million civil lawsuit filed against him by federal regulators.
Judge Alicemarie H. Stotler also denied Molinaro's request to delay a deposition scheduled later this month until after his Oct. 13 trial in San Francisco on criminal charges. He is accused of trying to use a passport issued in a dead man's name.
Molinaro had alleged that pretrial questions posed by lawyers for the Federal Savings and Loan Insurance Corp. (FSLIC) in its civil lawsuit against him could violate his Fifth Amendment right against self-incrimination in the criminal trial and in two other criminal probes he faces.
He also alleged that the agency, which was appointed receiver of the S&L, was involved in the passport investigation and in criminal investigations of his income tax returns and of Ramona's operations.
Stotler, however, agreed with FSLIC that an indefinite halt in the civil proceedings would unfairly compromise the agency's case and the interests of the public, the court and other defendants.
The Fifth Amendment is being invoked increasingly by defendants in civil cases who also face criminal probes. The tactic is a response to stepped-up prosecutions of those accused of white-collar crime, particularly bank fraud, securities fraud, defense industry fraud and claims arising under the federal Racketeer Influenced and Corrupt Organizations law.
Assets Ordered Frozen
Molinaro's attempts to halt pretrial hearings and to delay his deposition were hindered by allegations that he had violated previous court orders and by his delay in invoking the Fifth Amendment in three days of depositions during the summer.
A year ago, Stotler had ordered Molinaro not to transfer his assets without court permission, although he was allowed to spend up to $2,000 a month on living expenses.
After Molinaro's July 22 arrest in San Francisco, a federal prosecutor said the FBI had found evidence indicating that Molinaro had transferred as much as $7.5 million to offshore banks in the Caribbean. Such a transfer would violate the order freezing Molinaro's assets.