Court refuses S&L appeal S&L defendant loses bid to use funds sent to her from fugitive.

June 04, 1991|By Kelly Gilbert | Kelly Gilbert,Evening Sun Staff

Barbara A. McKinney, a defendant in the federal fraud case against several former Community Savings and Loan officials, has lost her bid to use $500,000 that was sent to her by federal fugitive Tom J. Billman.

The U.S. Supreme Court yesterday, without comment, refused to hear McKinney's appeal of a decision last October by the 4th U.S. Circuit Court of Appeals in Richmond, Va., that blocked her use of the money to pay her defense lawyer.

McKinney claimed that the court-ordered pretrial restraint on her use of the money deprived her of the right to hire a defense counsel lawyer of her choice.

McKinney, Community's former vice president and Billman's former mistress, is a co-defendant with Billman, another former Community official and Billman's holding company in a criminal fraud case tied to the Bethesda-based thrift's 1985 collapse.

That case is scheduled for trial this fall in U.S. District Court in Baltimore.

PTC Billman fled the country several years ago with $22 million in Community shareholders' money. He currently is the subject of an international search and a $200,000 reward that grew out of an arrest warrant issued in federal court here.

Prosecutors had sought to block McKinney from spending the $500,000, which she allegedly got from Billman's lawyer in London, on grounds that the money could be forfeited as illicit proceeds of Billman's alleged fraud if the government wins the criminal case.

The key issue in McKinney's appeal was the scope of pretrial restraint and forfeiture provisions in the federal Racketeering Influenced Corrupt Organizations Act.

U.S. District Judge Walter E. Black Jr. had ruled in Baltimore that McKinney should have access to the money unless prosecutors could prove the assets were the proceeds of a RICO offense.

But the 4th Circuit unanimously reversed Black's decision, which led to McKinney's Supreme Court appeal.

Even if the $500,000 could not be deemed proceeds of a RICO offense, the anti-racketeering law could bar McKinney's use of the money, the 4th Circuit said.

Assistant U.S. Attorneys Barbara S. Sale and Joyce K. McDonald said they were pleased with the Supreme Court's action yesterday, because it let stand what Sale called "a significant development of the law beyond this case."

McKinney's defense counsel of choice, Washington attorney Abbe S. Lowell, had told Black at court hearings here that he could not continue to represent her if she did not get access to the Billman money, because she could not otherwise afford his ** fee.

Lowell said he had no comment on the Supreme Court denial.

McKinney now is represented by two assistant federal public defenders.

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