Federal savings and loan regulators will go to court today seeking a preliminary injunction that would give them authority to oversee the personal finances of former Lincoln Savings and Loan owner Charles H. Keating Jr., according to OTS officials.
The officials said lawyers for the Office of Thrift Supervision will ask a federal court in Los Angeles to order Keating not to transfer any money or other assets out of the country without notifying OTS and to require Keating to have any expenditure of $5,000 or more approved in advance by thrift regulators.
Thrift regulators want the injunction to keep Keating from spending or transferring any funds that might be used to repay $41 million that the government claims he improperly siphoned out of his California thrift before it failed, leaving the taxpayers to cover $2 billion in losses.
Keating on Tuesday complied with a court order to give OTS an accountant's statement of his personal finances. Keating has maintained for some time that he is broke, but regulators said they don't believe him. OTS officials noted Keating has continued to live a wealthy lifestyle, staying at the Willard Intercontinental Hotel during his frequent trips to Washington from his million-dollar home in Phoenix.
OTS officials said the statement of Keating's finances would not be made public. Regulators will examine the financial statement and compare it with other information about Keating's finances that has been turned up by government investigators. If OTS lawyers find that Keating has assets not shown on the report given the court, both Keating and his accountants could face additional legal action.
Keating is already under a temporary OTS order giving regulators power to oversee his personal spending. OTS today will ask the U.S. District Court in Los Angeles to replace that administrative order with a preliminary injunction and then later to make the injunction permanent.