The state receiver of the Old Court Savings and Loan Association asked a Baltimore judge yesterday to hold the wife of the thrift's former owner in contempt of court for allegedly violating court orders restricting the couple's spending.
The Maryland Deposit Insurance Fund, in a motion filed with Judge Joseph H.H. Kaplan, alleged that Karol Levitt holds a Pennsylvania bank account on which $34,000 was withdrawn to pay Arleen Hoffer, the sister of Old Court owner Jeffrey Levitt. MDIF alleged that the Sept. 18 withdrawal violated the terms of a consent decree issued earlier under which the Levitts voluntarily agreed not to transfer any of their assets without the written consent of the court.
The $34,000 withdrawal came on the day that Kaplan imposed a $1,000-a-week spending freeze on the Levitts. MDIF is suing the Levitts and other owners and directors of Old Court for $200 million for their alleged mismanagement of the Baltimore thrift.
MDIF termed the withdrawal a "flagrant violation" of the court's orders and suggested it was "very likely other misconduct has occurred."
According to the MDIF motion, the Levitts' attorney said that the $34,000 was a loan to Levitt's sister and could be repaid within 30 days. The attorney, Paul Mark Sandler, could not be reached for comment.
Kaplan set a Jan. 8 hearing on the contempt motion.
In a related development yesterday, Gov. Harry Hughes ordered that 400 depositors at Old Court and Community savings and loans be given access to about $80,000 frozen in Christmas Club accounts.
"These mostly small, passbook accounts should be available for people who are counting on these funds for the holidays," said Hughes. Holders of the accounts may apply for access to the funds through the state's hardship withdrawal plan under a category that allows such withdrawals for miscellaneous expenses. Hughes said that depositors seeking access to Christmas Club accounts will not have to submit their tax returns to get their funds.
Most deposits have been frozen at the two thrifts since the institutions were placed under the state's control.