WASHINGTON -- The Resolution Trust corp. has filed a $1.5 billion fraud and racketeering suit against former top executives of the failed Western Savings and Loan Association of Arizona.
The suit accuses former Western president Gary Driggs, vice president Timothy Wright, and controller Peter Evans of using sham real-estate sales to defraud the thrift, causing $500 million in damages.
"Ultimately, the U.S. taxpayers will bear the burden of these damages if they are not recovered from the defendants," the RTC said in its filing.
Western was seized by the government in June 1989 after regulators forced it to post $204 million in losses in the 1988 fourth quarter. Before that loss, Western's top executives had fraudulently caused the thrift to report profits in 1986, 1987, and three quarters of 1988, the RTC said.