Former Ramona Savings & Loan Assn. owner John Lee Molinaro pleaded guilty to four criminal fraud charges Wednesday, admitting in court that he approved $10 million in loans to business associates who passed along most of the money to another friend who wanted to buy the S&L.
Molinaro, 46, is believed to be the first former savings and loan executive to be charged with criminal fraud relating to the collapse of a California savings and loan. State and federal regulators declared Ramona, located in Orange, to be insolvent in September, 1986.
Tracing the Proceeds
As part of his plea agreement with government prosecutors, Molinaro agreed to cooperate with the Federal Bureau of Investigation, the Federal Savings and Loan Insurance Corp. and the Internal Revenue Service in tracing and returning the loan proceeds. At least $6.4 million is believed to be deposited in foreign banks, according to court records.
Molinaro faces a maximum sentence of 20 years in prison and $1 million in fines when sentenced by U.S. District Judge David V. Kenyon Feb. 22.
Last week, Molinaro pleaded guilty to one count of passport fraud for attempting to obtain a false passport in San Francisco in July. He used the identity of a dead man to apply for a passport and was planning to leave the country, according to court records filed in that case.
Molinaro told Kenyon that he approved the loans as part of a plan that would allow Donald W. Stump to buy Ramona for $7.2 million. Acting as a loan officer for Ramona, Molinaro agreed to lend about $10 million to Robert F. Copeland and Jerry L. Copeland and companies they controlled.
The Copelands agreed to "make a substantial portion of the proceeds" available to Stump so he could buy Ramona from Molinaro, according to an information filed in federal court.
The Copelands, who have not been accused of any wrongdoing, gave Stump $6.4 million, most of which was eventually turned over to Molinaro.
Molinaro told Kenyon that he was under the impression the loans were being properly documented and would be used for buying and improving properties owned by the Copelands.
"Nowhere in any of the loan applications was it mentioned that the proceeds would be used by Stump," said Assistant U.S. Atty. Harriet Beegun. She said the loan applications were "processed irregularly" and the $10 million was "disbursed in a matter of days."
State and federal regulators thwarted Ramona's sale in July by refusing to allow Stump to take over the institution.