Billman given 40 years

June 22, 1994|By Marcia Myers | Marcia Myers,Sun Staff Writer

Tom J. Billman, the Maryland savings and loan executive who eluded authorities for four years after stealing millions from depositors, was sentenced yesterday to 40 years in prison and ordered to pay $25 million in restitution -- one of the toughest federal sentences ever for a financial crime in the United States.

U.S. District Judge J. Frederick Motz acknowledged that the punishment was severe but said Billman's actions justified it.

He cited a string of events: $29.5 million taken from depositors of Bethesda-based Community Savings and Loan; $22 million secretly wired to Swiss bank accounts; Billman's flight from the country in 1988; and his recent efforts from a Baltimore jail cell to maneuver about $6 million still in Europe.

Accusing Billman of repeatedly obstructing justice, Judge Motz said the public had had its fill of such scandals.

"Society finally has to say this is something which we will not put up with," the judge told Billman, 53, who had been convicted in April of fraud. "Regulators let us down, Congress let us down.

"I don't think you can be deterred, and I don't think you can be rehabilitated."

Billman's lawyer, John R. Fornaciari, said he would appeal the "outrageous" sentence, adding: "This is a life sentence for the guy."

Unlike more recent federal offenders, Billman will be eligible for parole because his crimes occurred before sentencing guidelines were established in 1987. But the financial losses and other circumstances of the case mean he probably will serve 20 years before he has a chance of being released, prosecutors said.

Sentences for fraud and other white-collar crimes usually pale when compared with those for narcotics and violent-crime cases.

Michael Milken, the junk bond financier at the center of Wall Street's biggest scandal, received a 10-year sentence -- later reduced to two years for good behavior and his cooperation with federal investigators.

In Maryland, the closest white-collar sentence was that of Jeffrey A. Levitt, who stole millions from Old Court Savings and Loan. He was sentenced in state court to 30 years in prison and served six before being released last year.

The international manhunt for Billman -- who concealed his identity with a half-dozen aliases and hid millions through scores of secret transactions -- was distinctive.

A tough sentence was virtually assured when prosecutors disclosed last month evidence that Billman had millions in assets that he was trying to transfer from Europe to his wife and lawyers, and to clear up his back taxes. They revealed a letter Billman had sent from jail to a European courier, using cryptic messages and code words to outline instructions for financial transactions.

In that letter, Billman also had predicted a two-year sentence -- "a rehabilitative vacation," he called it -- and had described plans to resume international travel and business deals.

Yesterday, as his sentence was announced, the former financier leaned forward in his chair and Mr. Fornaciari asked the judge to repeat himself.

Billman's shoulders sank as the judge spoke, then he calmly poured himself a glass of water. Although Billman appeared stoic in court, Mr. Fornaciari later described him as shocked and upset.

Prosecutors were elated with the decision. Assistant U.S. Attorney Barbara S. Sale and co-prosecutor Joyce McDonald worked on the case for eight years.

"It's very, very gratifying to see justice done in this case," Ms. Sale said. "It's been a long, long road."

Billman addressed the court briefly during the two-hour sentencing hearing. In his first public statements since being extradited from France late last year, he admitted no wrongdoing and offered no apologies.

Much of his recent financial maneuvering was designed to resolve civil actions against him, he said. "At no time did I ever plan to be guilty, and then defraud, lie and cheat," he said.

For the Maryland Deposit Insurance Fund, which insured Community's depositors, the restitution ordered by the judge was sweet, although officials believe they have recovered the bulk of his assets.

During Billman's trial, MDIF received $13.5 million after negotiations with his Swiss lawyers. It is uncertain how much, if ,, any, of the more than $6 million of assets frozen in Europe may be turned over to the fund.

"We think there's at least another million out there," said MDIF attorney Neil Dilloff.

He said Billman had transferred some of his assets to others. "We know who the others are, and we are now going to pursue that money," he said, declining to elaborate.

The Billman saga began in the mid-1980s, when Community Savings and Loan failed. He and other executives were sued by MDIF, and in late 1988, while under federal investigation, he used a phony passport to flee the country.

Billman, who had wired $22 million to Swiss accounts, lived lavishly on Spain's Costa del Sol for a time, buying two yachts and cruising the Mediterranean.

He was arrested in Paris in March 1993 after authorities received a tip from someone who recognized his picture from a "wanted" notice in the International Herald Tribune.

After a two-month trial, Billman was convicted on 11 counts of mail and wire fraud.

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