WASHINGTON - The Office of Thrift Supervision charged prominent Texas businessman Charles E. Hurwitz and five colleagues Tuesday with contributing to the 1988 failure of United Savings Association of Texas.
The failure cost the thrift deposit insurance fund more than $1.6 billion and was one of the most costly of the 1980s savings and loan crisis.
The OTS filed 10 administrative claims against Mr. Hurwitz and 11 against Maxxam Inc., the diversified Houston-based holding company he heads. Also charged were: Federated Development Co., a New York business trust; and five present and former directors and officers of United Savings and its holding company, United Financial Group.
The agency is seeking civil penalties of $839,000, restitution of more than $300 million, and the prohibition from banking of Mr. Hurwitz and his five colleagues.
United Financial, now in bankruptcy, was not charged. It settled out of court with the OTS and the Federal Deposit Insurance Corp. on Dec. 13, agreeing to pay $9.45 million in restitution, subject to bankruptcy court approval.
A separate $250 million FDIC lawsuit against Mr. Hurwitz is still pending in U.S. district court in Houston.
In 1985, Mr. Hurwitz, Federated Development, and Maxxam predecessor MCO Holdings Inc. took control of United Savings and United Financial with the help of the now defunct Wall Street firm of Drexel, Burnham & Lambert and transformed it into a vehicle for high-risk investments.