Old Court Savings and Loan Association sold several properties to a close associate of Old Court President Jeffrey Levitt and loaned more money than needed for the purchases, according to a Baltimore newspaper report.
During the last two years the financially troubled thrift sold several valuable Baltimore County properties to Fineland Enterprises Inc., a company owned by Jerrold Gottlieb, The Baltimore Sun reported yesterday. Gottlieb, an associate of Levitt's, also was president of Levitt Builders.
The report said that in each case the loans were made for amounts significantly greater than the selling price of the Old Court properties, and the buyers did not put up any of their own money -- an action contrary to standard industry lending practices.
In one deal, Old Court sold land to Levitt Builders for $585,000 and lent the builders $1.6 million for the transaction, the Sun reported.
A spokesman for Gottlieb told the Sun that Levitt Builders is owned by Levitt's family. Jeffrey Levitt's wife, Karol, was listed as president of Levitt Builders in its 1983 incorporation papers.
Public documents show Old Court provided financing of more than $10.4 million for six purchases made by Fineland Enterprises and Levitt Builders. The properties are valued at $4.4 million, the paper said.
Reports of mismanagement at Old Court in May sparked a run at many of the state's 102 then-privately insured savings and loans. Levitt, who owns 41 percent of Old Court as one of the savings and loan institution's three owners, was removed from control in May when a state conservator took over.
The state attorney general's office is investigating Levitt and Fineland's transactions with Old Court.