A former Dallas thrift executive was indicted on criminal charges of bank fraud stemming from the $1 billion collapse of Western Savings Association.
The criminal charges, filed Thursday, come on the heels of a civil suit filed against Jarrett Woods last week in Dallas by the Federal Deposit Insurance Corp. The suit contends he defrauded Western of at least $560 million and spent $7 million of depositors' money in the months before the thrift collapsed in 1986."The indictment of Jarrett Woods means that we have corraled one of the biggest savings and loan bandits in Texas," Attorney General Dick Thornburgh said in announcing the indictment. "The free-wheeling lifestyle and fraudulent management practices that led to Western's collapse really helped to set the trend for this national thrift crisis that we are dealing with."
Prosecutors said Woods tried to conceal bad loans to real estate developers by diverting millions of dollars of depositors' money. The indictment charges Woods with conspiracy to defraud government regulators, misapplication of Western's funds, bank fraud, making false entries in Western's books, illegally participating in a Western transaction himself and unlawfully receiving funds.
If convicted on all charges, Woods faces up to 185 years in prison and fines ranging from $8.2 million to up to twice the amount of the loss.
U.S. Attorney Marvin Collins said most of the diversions involved bad loans Western made to James Reagin, a Dallas real estate developer.