SAN JOSE, Calif. -- A federal judge threw out the bank fraud convictions of five men, including the president of the company that owns California's famous Pebble Beach golf course.
U.S. District Judge James Ware ordered a new trial after ruling that the jury in the seven-week trial that ended last month was "unfairly prejudiced" by too much evidence of a conspiracy with which the defendants were not charged.
"I realize this is not good news for the government, nor for the defendants, nor the court. There is no victory here," Judge Ware said of his decision to order a retrial of the complex case.
List of Convicted
Thomas Oliver, president of the Japanese-owned Pebble Beach Co., which owns the golf course, was convicted of bank fraud by the jury in San Jose last month.
Also convicted of bank fraud were Robert Hopkins Jr., a banker from Dallas; Blynn Shideler, a physician from Pebble Beach; businessmen William Lane, of Coral Gables, Fla., and his brother-in-law Robert Bonner of Pebble Beach.
Sentencing had been set for July. Mr. Hopkins, who had also been convicted of misapplying the funds of a savings and loan, faced up to 40 years in prison and the other defendants up to five years.
Defense Motion Granted
But Judge Ware granted a defense motion to throw out the convictions and to order a new trial. He said the jury could have been prejudiced by evidence of a conspiracy presented by prosecutors during th trial before the judge dismissed a federal conspiracy charge against the men.
Assistant U.S. Attorney Richard Seeborg said prosecutors were considering whether to appeal Judge Ware's decision.
"We disagree very vigorously with the judge's conclusion. We think that the verdicts that the jury returned are proper and valid," he said.
Origin of Case
The case stemmed from a 1984 attempt to take control of the Bank of Los Gatos in suburban San Jose. Prosecutors alleged that the defendants defrauded Commodore Savings and Loan of Dallas in a scheme beginning in April 1984.
They alleged that Mr. Hopkins, then chairman of Commodore, arranged for the other defendants to receive loans to buy stock in the Bank of Los Gatos and to hold the stock for Mr. Hopkins, who planned to try to take over the bank.
Mr. Hopkins secretly promised the other defendants they would not have to repay the loans, according to the charges.
Both Commodore Savings and Loan and the Bank of Los Gatos eventually failed and were placed in federal receivership.