Thrift Failures

This report contains information on the number of (1) civil actions brought by the federal government against failed thrifts, including recoveries received from professional liability suits and settlements; (2) referrals filed with the Justice Department concerning suspected criminal activity in Resolution Trust Corporation (RTC) thrifts; and (3) sentences imposed on convicted criminal wrongdoers, including the amount of fines and restitution both ordered and collected. Of the 723 savings and loans that RTC controlled as of September 1, 1992, the federal government took civil or criminal actions against individuals at 271 institutions (37.5 percent). The largest numbers of RTC thrifts were located in California, Florida, Illinois, Louisiana, New Jersey, and Texas. Generally, RTC thrifts in those locations were also associated with the greatest amount of civil and criminal enforcement activity.

GAO found that: (1) RTC has filed 217 civil professional liability claims involving 157 of the 723 RTC-controlled thrifts; (2) civil claims total nearly $6.4 billion, and RTC has recovered nearly $111.4 million; (3) the Department of Justice does not have comprehensive data on the number of civil actions it has taken against RTC-thrift related offenses; (4) RTC, the Office of Thrift Supervision, and various thrifts have filed 2,912 referrals of suspected criminal conduct involving 508 RTC thrifts and losses totalling $5.4 billion; (5) at the end of 1992, the Federal Bureau of Investigation and the Secret Service had 415 ongoing criminal investigations against failed thrifts; (6) Justice has filed 304 cases since the beginning of 1989 and has won convictions against about 93 percent of the RTC defendants prosecuted; (7) nearly 70 percent of convicted RTC thrift defendants have received prison sentences of less than 2 years; (8) courts ordered thrift offenders to pay over $176 million in fines and restitution, and the government has collected over $5.9 million; (9) 57 RTC thrifts, that controlled 21 percent of the 723 RTC thrifts' total assets, had civil and criminal actions filed against them, and those thrifts were associated with more numerous and egregious offenses; and (10) defendants associated with those 57 thrifts received longer sentences than did other offenders.