Charles Keating, disgraced financier in 1980s savings and loan scandal, dies at 90

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Posted: Wednesday, April 2, 2014 12:00 am

PHOENIX (AP) — Charles H. Keating Jr., the notorious financier who served prison time and was disgraced for his role in the costliest savings and loan failure of the 1980s, has died. He was 90.

A person with direct knowledge of the death confirmed Tuesday that Keating had died but didn't provide further details. The person wasn't authorized to release the information and spoke on condition of anonymity.

When Keating's Phoenix-based home construction company, American Continental Corp., bought Lincoln Savings & Loan in 1984, the multimillionaire elevated its worth from $1.1 billion to $5.5 billion in a four-year period.

But his financial empire crumbled with state and federal convictions for defrauding investors. Keating allegedly bilked Lincoln customers by selling them $200 million of unsecured “junk” bonds. They became worthless when Keating's company became bankrupt.

The thrift's collapse cost taxpayers $2.6 billion and tarnished the reputations of five senators who became known as the “Keating Five.” One of them was Republican Sen. John McCain of Arizona, and the scandal re-entered the spotlight during the 2008 presidential campaign.

As the public heard testimony of elderly bondholders who had lost their life savings, Keating became a national poster boy for corporate greed. Keating was convicted in both state and federal court, but the convictions were thrown out and he agreed to a federal plea deal that freed him after nearly five years in prison.

Copyright 2014 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

© 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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