Charles H. Keating, whose failed Lincoln Savings and Loan symbolizes the nation's thrift scandal, was jailed on charges he defrauded mostly elderly investors who spent $250 million on now-worthless junk bonds.

"These victims are people who have lost their life savings and are probably never going to see that money again," Los Angeles District Attorney Ira Reiner said at a news conference Tuesday after Keating and three other executives appeared in court on a 42-count indictment handed up by a special county grand jury.Reiner said most of the money went from Lincoln to its parent, American Continental Corp., and ultimately to Keating, who has claimed he is broke. If convicted of six or more of the counts, Keating could face up to 10 years in prison.

Reiner said many of the 22,000 investors did not understand that the bonds, sold through Lincoln's 29 branches in Southern California beginning in late 1986 through most of 1988, were high-risk and not federally insured.

"The nature of these investments was misrepresented," Reiner said. "When people came in with their life savings, they thought they were dealing with people who had their best interests at heart."

Federal regulators have already accused Keating, the former chairman of American Continental, and five associates of using bogus tax shelters and dubious land deals to divert more than $40 million from Lincoln. Federal authorities have filed a $1.1 billion civil fraud suit against Keating, who is also under investigation by a federal grand jury.

Also pending is a $300 million civil suit filed in June by the California attorney general's office against Keating and American Continental's accounting firm. Disgruntled purchasers of American Continental junk bonds, many who lost their life's savings, also have filed class-action suits against Keating.

But the indictment is the first criminalcase stemming from the collapse of Irvine, Calif.-based Lincoln 17 months ago. It includes 40 counts of securities fraud and two of making false statements to state regulators.

The indictment covers only the junk-bond sales. "We tried to have the investigation be very tightly focused, so that it could be easily comprehended by a jury," Reiner said.

Superior Court Judge Gary Klausner delayed taking pleas from Keating and his co-defendants until Oct. 5, and then ordered Keating held in lieu of $5 million bail.

Keating's attorney, Stephen C. Neal, argued that Keating should be released without bail, citing his "umblemished" record of making court appearances and noting that he surrendered voluntarily. Neal also said that Keating has no assets overseas.

But Klausner, pointing out that Keating may have to go to prison for 10 years, said the case "certainly justifies a substantial bail."

Prosecutors made no recommendation on bail, but Reiner said that he agreed with the judge's action. Klausner ordered Keating's co-defendants - Judy Wischer, 42, American Continental's former president; former Lincoln President Ray Fidel, 32, and former Lincoln Chief Executive Officer Robin Symes, 37 - held in lieu of $1 million bail each.

Keating has argued that regulators ruined American Continental, which filed for bankruptcy the day before Lincoln was seized, by flooding the Arizona real estate market with low-priced property from other failed thrifts.

Keating and Neal made no comment before or after the 45-minute court hearing.

Lincoln's failure is expected to cost taxpayers more than $2 billion, making it the costliest bailout yet in the massive nationwide savings and loan scandal.