Officials acquitted of conspiracy and fraud 4-month federal trial ends. One man still sought.

2 S&L

April 22, 1992|By Norris P. West | Norris P. West,Staff Writer

Two former top officials of Community Savings and Loan have been acquitted of charges that they defrauded depositors of millions of dollars to prop up a mortgage company and line their own pockets.

After a four-month bench trial in U.S. District Court in Baltimore, Chief Judge Walter E. Black Jr. returned the not-guilty verdicts yesterday for Clayton C. McCuistion, 49, the thrift's former president, and Barbara A. McKinney, 41, a former Community director and one-time vice president and legal counsel of its defunct holding company.

They had been charged, along with the Crysopt Corp., the holding company, with conspiracy, wire fraud and mail fraud.

Community collapsed in 1985. Prosecutors alleged that its former chairman, Tom J. Billman, 52, masterminded a conspiracy to defraud depositors. He was charged, too, but fled the country in 1988 with $22 million of depositors' money. He is a federal fugitive and subject of a $200,000 reward.

Judge Black ruled that Assistant U.S. Attorneys Barbara S. Sale and Virginia B. Evans failed to prove Mr. McCuistion, Ms. McKinney and Crysopt had conspired to defraud the S&L's customers.

"The evidence presented in the case may reasonably permit the court to reach a conclusion that the actions of these defendants were intended to accomplish certain business purposes," the judge said.

Mr. Billman and Mr. McCuistion owned Equity Programs Investment Corp. (EPIC), a real estate syndicate that invested in housing ventures nationwide, when they bought Community in 1982. The thrift served Washington's Maryland suburbs.

In 1984, Community officials used the thrift's money to fund the operations of EPIC, its mortgage company and related partnerships.

Prosecutors had charged that Community officials conspired to divert $106 million to maintain EPIC after its mortgage partnerships began to falter, and illegally kept $28 million for themselves.

Billman, who was Ms. McKinney's boyfriend, fled after a Montgomery County circuit judge imposed a $112 million civil judgment on Community officials.

"Clearly, Tom Billman was the lead defendant in this case . . . his flight from prosecution has made our jobs even more difficult," U.S. Attorney Richard D. Bennett said after Black's verdict.

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