Mortgage Companies Are Seized

DENVER - Federal law-enforcement officials have seized three Seattle mortgage companies that allegedly siphoned more than $18 million from the failed Great West Savings Bank in Craig.

U.S. Attorney Mike Norton announced the seizures, and officials with Resolution Trust Corp. moved into the companies yesterday. All three were closed for business.

It was the first action of its kind under provisions of new thrift-bailout legislation, passed last year in part to stiffen penalties and speed up prosecution of thrift criminals.

The illegal transfers allegedly occurred in 1988. Great West failed in May 1990 and is being operated by the RTC.

Among the mortgage companies seized was Inland Empire Mortgage Corp., a subsidiary of Great West Savings Bank. The government also seized Inland's affiliates, Evergreen Escrow Corp. and First Regency Mortgage Corp. All have headquarters in Seattle.

Investigators believe the money was used for ``improper business purposes and personal expenses.''

Resolution Trust will operate the companies until the investigation is complete.

Larry Firebaugh, managing agent for the Resolution Trust at Great West Savings in Colorado, said the companies would open for business after federal officials determine where assets are.

Norton would not identify former officers or owners of the bank, nor say whether they are under investigation.

Bob Pence, FBI special agent in charge for Colorado and Wyoming, said some search warrants were executed in Colorado, but he wouldn't elaborate.

The seizures followed a 10-month investigation by Norton's office, the FBI, the IRS and other agencies.

Both Norton and Pence said they have been hampered by the enormous complexity of thrift cases while lacking qualified staff to handle them. Both hoped to move forward more quickly now that 15 new investigators have been hired for the FBI's financial crime task force in Denver and six new prosecutors are being recruited by Norton's office to handle thrift cases.