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U.S. Indicts Ex-S&L Owner, 3 Other Officers

January 28, 1989|From United Press International

SAN FRANCISCO — Real estate financier J. William Oldenburg and three former officers of a Utah-based savings and loan were indicted Friday for conspiracy to defraud the thrift of $26.5 million in 1984.

The federal grand jury indictment names Oldenburg, 50, former chairman and owner of State Savings & Loan Assn. in Salt Lake City, as well as former thrift officers James Rossetti, 52; Nicholas L. Muccino, 59, and Martin L. Mandel, 44.

Oldenburg, who has described himself as a self-made billionaire, owned the now-defunct Los Angeles Express of the United States Football League.

Firm Taken Over

The Utah thrift was purchased by Oldenburg for $10.5 million but collapsed in 1985 and he was sued by federal regulators.

The thrift was taken over by New Mexico-based Sandia Federal Savings & Loan.

The indictment charges that the men conspired to misapply $26.5 million in State's funds. It also charges them with fraud and lying to credit institutions in creating a real estate deal in which State Savings would buy a 363-acre development in Richmond, Calif., known as Park Glen Estates.

The deal was allegedly to have State Savings, owned by Oldenburg, buy the Glen Park development from Oldenburg's solely owned Empire State West Inc., a Washington state corporation, by running the money through International Mortgage Services Inc., another Oldenburg enterprise in California.

The indictment alleges the appraisals of the Park Glen project were highly inflated.

Rossetti, a senior vice president of IMI and former president of State Savings between 1983 and 1984, was named in the alleged conspiracy along with Muccino, former senior vice president of IMI and on the board of the State Savings & Loan, and Mandel, IMI senior vice president and corporate counsel between 1983 and 1984.

Mandel was also on the board of State Savings.

The Utah thrift also had offices in Hawaii.

If convicted on all counts, Oldenburg faces 42 years in prison and $44,000 in fines. The other three each face 40 years in prison, according to U.S. Attorney Joseph Russoniello.

All four men are scheduled to surrender to a federal magistrate on Feb. 10.

Called Deals Sound

The short, stocky financier gained his success at IMI, which was a brokerage firm that found loans for developers.

Oldenburg has been accused in the past of using the IMI firm to lure weak thrifts into highly speculative real estate developments while calling them sound.

He bought the Utah savings and loan in Oct., 1983 but stepped down as chairman less than a year later, in June, 1984.

Nine days after he took control of the institution, his brokerage firms were paid $17.6 million in procurement fees for six highly speculative development projects, according to the suit by federal regulators in Utah.

The indictment maintains that the conspiracy was between 1983 and 1984.

Oldenburg nearly went broke in 1970 after a lender foreclosed on a big apartment project in Redmond, Wash.

In 1974, he settled a civil lawsuit in federal court in Seattle in which the Securities and Exchange Commission accused him of defrauding limited partner investors in the project.

He never admitted wrongdoing in the case.

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