Keating Pleads Not Guilty of Bankruptcy Fraud

Charles H. Keating Jr. and one of his former top aides pleaded not guilty Wednesday in Phoenix to federal bankruptcy fraud and conspiracy charges stemming from the 1989 collapse of Lincoln Savings & Loan in Irvine and its parent company.

Keating, Andrew F. Ligget and Judy J. Wischer were accused in a Jan. 15 indictment of defrauding creditors in the parent company, American Continental Corp. in Phoenix. Keating, 68, was the company’s chairman; Ligget, 34, its chief financial officer. Wischer, 43, who entered her plea of not guilty on Tuesday, was the company’s president.

In the two months before the company filed for bankruptcy protection, the five-count indictment alleges, the defendants funneled $975,000 through a Lincoln subsidiary to Keating, his family and Wischer’s husband as six unsecured loans.

The facts alleged in the indictment are also included in a 77-count indictment filed against them and two others in December by a federal grand jury in Los Angeles. Keating’s attorneys filed a motion Wednesday asking that the Phoenix case be transferred to the federal court in Los Angeles for the convenience of witnesses and a savings in court time and costs.

U.S. District Judge Earl H. Carroll, who was assigned the Phoenix case, has not determined yet if he will have a hearing before ruling on the motion to transfer the case. He set a tentative trial date of March 17.

Wischer’s attorney, Thomas Hoidal, a deputy federal public defender, said no decision had been made yet whether to join in Keating’s motion. Ligget’s attorney could not be reached. Charles M. Steele, an assistant U.S. attorney, said that a transfer, if granted, would likely include all defendants.

Trial in the Los Angeles case is scheduled for Aug. 4. The larger indictment accuses Keating, Wischer, Ligget and two others of bank fraud, conspiracy and racketeering. In that document, the loans constitute one of five alleged criminal schemes used to support the contention that the defendants ran American Continental as a racketeering enterprise.

In Phoenix, U.S. Magistrate Judge Michael Mignella set the same bail that was eventually set in the Los Angeles case: $300,000 each for Keating and Wischer and $200,000 for Ligget. All three posted bonds, secured by real estate, and were released.