In lieu of an abstract, here is a brief excerpt of the content:

CHAPTER 9 A Tangle of Savings and Loan Scams In the years before I became US attorney, the seeds had already been sown in Maryland that would grow into a messy tangle of savings and loan corruption scandals that would occupy a good portion of our time and attention as federal prosecutors. In nearly three years in office, we prosecuted three major savings and loan cases and a number of minor ones. We convicted a wealthy insurance executive from California for setting up a phony deposit insurance firm and fraudulently trying to use it to insure deposits in Maryland . We convicted two men from Illinois and Utah who owned—and plundered—several S&Ls in Maryland and elsewhere. We convicted a conniving financier from Florida, as well as the two former Democratic members of Congress he bought off. And we indicted the Speaker of the Maryland House of Delegates and several of his Baltimore County political associates for savings and loan fraud. Common threads ran through all these cases. Almost all involved bogus claims, false advertising, insider dealing, and appalling misuse of depositors’ funds, or they involved fraudulent assertions about the financial condition of the S&Ls or about the companies that insured S&L deposits. Some of the same names popped up in more than one case: Stewart B. Hopps of San Francisco, C. Oran Mensik of Chicago, and J. Kenneth Edlin of Miami.1 Hopps’s shell company in Tangier, Morocco, provided 1. Hopps and his son, Robert, had been indicted in Maryland on mail fraud charges on July 13, 1960. Mensik, shortly before I became US attorney, had been tried in US District Court in Maryland on charges that he had set up the Commercial Savings and Loan Association in Maryland, lured customers with gimmicks for new deposits, and then illegally milked the firm by taking dividends, making speculative loans, and falsely claiming that deposits in the S&L were adequately insured. On March 24, 1961—the same day I resigned my seat in the Maryland House of Delegates to accept appointment as US attorney—a jury told Judge R. 134 CHAPTER 9 worthless insurance for depositors at S&Ls owned or run by Mensik and Edlin. It was Edlin who secretly bribed two members of Congress in a futile attempt to have them convince Robert F. Kennedy and the Justice Department to drop an indictment against him. And it was Mensik who dispatched a Chicago lawyer with a pocketful of money to Maryland to persuade the soon-to-be Speaker of the House, A. Gordon Boone, to set up a deposit insurance firm that never had the assets it claimed. All of this was happening in Maryland, of course, because statechartered S&Ls were virtually unregulated, as I had warned in the General Assembly for more than two years. S&L operators could do almost anything they wanted without fear of oversight. Stewart Hopps, the “Brilliant Ventriloquist” Advertising sent through the US mail was what did in Stewart Hopps. In 1958, International Guaranty and Insurance Company, the Moroccan firm for which Hopps was said to be the American manager, dropped into the mail a statement intended to drum up national interest in the deposit insurance it offered by demonstrating the company was financially sound. The problem was that the mailing contained completely false statements about the financial condition of the company.2 Two of the many recipients of the brochure were Charles F. Jackson, the Maryland insurance commissioner, and the Baltimore Better Business Bureau, and those two mailings provided the basis for the two-count mail fraud indictment against Hopps. Al Murray, our postal inspector, liked to say, “If I can find the fraud, I can always find the use of the mails.” In 1960, my predecessor convened a Maryland grand jury that indicted Hopps, who lived in Belvedere, a wealthy island community in San Francisco Bay near Sausalito. His indictment said that among the assets International claimed in the mailing were “worthless stocks and bonds of [four] paper corporations incorporated in Panama.”3 In my Dorsey Watkins that it was deadlocked and unable to reach a verdict. Edlin had been indicted on November 17, 1959, for his illegal activity in two Maryland S&Ls. 2. The mailing was entitled “International Guaranty and Insurance Co., Statement of Condition, 1958.” 3. Associated Press, “Insurance Fraud Seen: Hopps Indicted on Charges by Grand Jury Here,” Baltimore Sun, July 14, 1960, 15. 135 A TANGLE OF SAVINGS AND LOAN SCAMS opening statement at his trial, I characterized the millionaire Hopps as a “brilliant ventriloquist” who spoke through...


Additional Information

Related ISBN
MARC Record
Launched on MUSE
Open Access
Back To Top

This website uses cookies to ensure you get the best experience on our website. Without cookies your experience may not be seamless.