Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SUNDAY, February 17, 1991                   TAG: 9102170270
SECTION: VIRGINIA                    PAGE: D-3   EDITION: METRO 
SOURCE: Associated Press
DATELINE: LOS ANGELES                                LENGTH: Medium

`KEATING OF VA.' TO BE FREED ON BAIL

Eric Freedlander, 43, who was president of Freedlander Inc., The Mortgage People, was indicted Tuesday on 83 counts of conspiracy, fraud, misapplication of savings-and-loan funds and filing false reports to a financial institution.

The family-run company, based in Richmond, Va., was the nation's fourth-largest second-mortgage lender before its collapse in 1988.

"I'm not going to detain him because his whereabouts have been known and he hasn't been in hiding," U.S. Magistrate Joseph Reichmann said at a hearing Friday.

Arguing against bail, Assistant U.S. Attorney Russell Petty cited the severity of the sentence Freedlander faces if convicted. He could draw a total penalty of 425 years in prison and $20 million in fines.

"This man is the Charles Keating of Virginia," said Petty, referring to the former Lincoln Savings and Loan chief who is at the center of the nation's largest thrift failure.

"If he is released on bond and flees, it will be too late," Petty said, arguing that he believes Freedlander "has been salting away assets."

The judge set bail at $150,000, specifying that bail be posted with $50,000 in property and the rest covered by a bond. He ordered Freedlander to surrender his passport and restricted his travel to California and Virginia, where the 71-page federal indictment was issued last week.

As of Saturday morning, Freedlander had not posted bail and was still in custody, officials said.

Freedlander's mother, Eve, was sentenced to 10 years in prison last year for her role in the fraud scheme. His brother, Benjamin, also pleaded guilty and got a one-year sentence.

Under plea agreements, both are required to cooperate with the government, and if called upon, to testify against Eric Freedlander.

Prosecutors claim the company, which had 88 offices in 33 states before its collapse, misled investors about the quality and performance of its loans, kept secret any foreclosures, and misappropriated funds to pay investors until the money ran out.

Prosecutors, describing the case as the largest fraud case ever brought in Virginia, charge that company losses were fraudulently hidden, with investors paid back with money from new investors.

Prosecutors alleged the fraud had been going on since the business was started in the 1960s by Eve Freedlander and her husband, Ruben. Ruben Freedlander was not charged.