Maryland prosecutors presented their first evidence yesterday to a federal grand jury that is expected to weigh criminal charges against former officers of Old Court Savings and Loan Inc., the Baltimore thrift that triggered a crisis in the savings and loan industry four months ago, government sources said.
The grand jury, which by law considers evidence in secret, heard no testimony from witnesses yesterday, but began sifting through the mountain of financial records crucial to the joint state-federal case against former officers of the thrift, the sources said.
Meanwhile, a law enforcement official in Nassau County, N.Y., confirmed a published report that former Old Court president Jeffrey A. Levitt is under investigation as part of a local inquiry into the possible bribery of public officials in exchange for favorable votes in zoning decisions.
"We're interested in the influence of certain corporations, including Mr. Levitt's, on the public officials" who made key votes in a large urban renewal project in the Long Island city of Glen Cove, said Burton T. Ryan Jr., an assistant district attorney in Nassau County.
Ryan confirmed a report in yesterday's Baltimore Sun that Levitt's name surfaced in late 1984 in his investigation of the development project. In a report filed with the New York state government last December, Levitt listed himself as a shareholder-sponsor of Village Green Realty at Garvies Point Inc., which was to provide key financing for condominium construction on the north shore of Long Island, about 20 miles from New York City.
Another law enforcement source said Ryan's investigation has yielded more than 100,000 documents from nearly 30 corporations involved in the development project. The source said Ryan's investigation centered on low- or no-interest home loans that local politicians allegedly received for favorable votes in zoning cases.
Paul Mark Sandler, Levitt's attorney in Baltimore, called the reported investigation "ridiculous" and declined further comment "until there was more than innuendo and wild sensationalism."
For months, Levitt and Old Court have been in the eye of the storm that crippled segments of Maryland's $10 billion savings and loan industry. Reports of mismanagement and possible criminal wrongdoing at Old Court triggered a run on deposits there, touching off similar runs at other thrifts.
Levitt and other former Old Court owners and directors are the targets of a $200 million civil suit, filed by the thrift's state conservator, that described their business dealings as "the largest financial fraud in the history of the state of Maryland."
Old Court is one of four large thrift associations whose deposits have been frozen by either court-ordered conservatorship or the executive order of Maryland Gov. Harry Hughes.
Maryland Attorney General Stephen H. Sachs, who has announced that his office is conducting a criminal investigation of Old Court, could not be reached for comment.
In other developments yesterday, officials in Montgomery and Prince George's counties announced that some residents whose money is tied up in the four frozen thrift associations would be granted extensions to the Sept. 30 deadline for paying local property tax bills.
Extensions will apply only to those taxpayers whose money is tied up at Old Court, Merritt Commercial, First Maryland or Community Savings and Loan.