Appraiser Guilty in Irvine Bank Loan Case

A Glendale real estate appraiser for defunct Consolidated Savings Bank of Irvine pleaded guilty Monday in federal court to charges of conspiring to mislead the institution and failing to file income tax returns.

Harlan Wolfe, 61, pleaded guilty to conspiring to prepare a phony appraisal of a home for Consolidated so that the thrift’s books would disguise a crooked $500,000 real estate loan to unnamed straw borrowers. Straw borrowers, who act as middlemen in obtaining loans to hide the identity of true borrowers, were key links in helping defraud S&Ls;, federal prosecutors said.

Assistant U.S. Atty. Gregory D. Schetina said that as part of the conspiracy, Wolfe misrepresented the value of a Laguna Beach home at $850,000 by saying it was a custom-built oceanfront house, when he knew that it was several miles from the beach and was worth about $200,000.

Wolfe allegedly funneled the extra money to Pyrotronics, an Anaheim-based fireworks company that was owned by Orange County businessman W. Patrick Moriarty, who served 29 months in jail after convicted of charges related to political corruption. Consolidated’s owner, Robert A. Ferrante, has been called a close business associate of Moriarty.

Wolfe also pleaded guilty to four counts of failing to file income tax returns from 1983 through 1986, Schetina said. The appraiser had been charged with seven misdemeanor counts of failing to file income taxes.

Wolfe faces a maximum of nine years in prison and fines up to $650,000. He could also be ordered to pay restitution.

Consolidated was a small, but high-profile, savings bank with $57 million in assets at the time it failed in 1986. Officials had contended they were victimized by regulators and larger competitors. But the institution, taken over by regulators in 1986, was cited by a House committee investigation in 1988 as a prime example of S&L; fraud.

Schetina said Consolidated is under continuing investigation by the U.S. attorney’s office, the Internal Revenue Service, and the Federal Bureau of Investigation. The FBI said in June that the Consolidated investigation was a top priority.

Banking regulators have also filed a civil suit against Ferrante and former officers of the savings bank. The suit alleged that Consolidated officers looted the savings bank of more than $40 million. The company’s officers have denied the charges.

Earlier this year, Oklahoma City businessman Charles J. Bazarian was sentenced to four years in jail after pleading guilty to charges of defrauding Consolidated and American Diversified Savings Bank in Costa Mesa.