Former Officers of Defunct Texas Thrifts Indicted : Bailout: Atty. Gen. Dick Thornburgh says alleged illegal conduct at 234 failed S&Ls; nationwide is under investigation. The latest case involves a Los Alamitos lawyer.

WASHINGTON —  Former executives of two insolvent Texas savings and loans that are on a federal list of the 100 worst S&L; fraud cases were indicted by federal grand juries Tuesday, the Justice Department announced.

Among those indicted was a Los Alamitos lawyer, Alan Ross Rothery, who was accused of embezzling more than $4 million through fraudulent loan schemes from Trinity Valley Savings & Loan in Beaumont, Tex., in 1985 and 1986.

Atty. Gen. Dick Thornburgh said Tuesday that the FBI and prosecutors are investigating allegations of criminal conduct at 234 failed savings and loans across the nation, a process that, he said, will take two to three years to complete.

U.S. officials are placing top priority on the 100 failed S&Ls; where regulators believe the fraud was most widespread. James G. Richmond, the special counsel who is coordinating the inquiry, said he expects criminal charges to be filed in most of those 100 investigations.

“Roughly 90% of them should evolve into good criminal prosecutions,” Richmond said.

According to the indictment of Rothery, he was chairman of Orange Coast Thrift & Loan in Los Alamitos in 1985 when he used $1.6 million of the institution’s money to buy control of Trinity Valley Savings & Loan. Orange Coast was declared insolvent and seized by regulators in 1986. Trinity also was declared insolvent in 1986, and its losses are expected to cost the government $33 million.

The indictment said Rothery had used Trinity’s money to reimburse Orange Coast for the $1.6 million and had engaged in several other embezzlement schemes involving loans to entities that he and his associates controlled.

John Coughlan Jr. of Long Beach and his brother, Erroll Coughlan of Malibu, were charged with helping Rothery divert some of the funds. On July 24, the Coughlans were indicted in Los Angeles on charges of defrauding a variety of U.S. financial institutions of $8 million.

An attorney for the Coughlans did not return a telephone call, and attempts by The Times to locate Rothery were unsuccessful.

In the other indictment, four former officers of Lamar Savings and two borrowers were charged in connection with the alleged misapplication of $121 million from the now-defunct thrift, which was based in Austin.

Among those charged was Stanley E. Adams Jr., who was chairman and principal stockholder in the institution.

“Our investigation and prosecution of criminal fraud in the nation’s thrift industry is pushing ahead to the point where we can begin to clearly identify patterns of illegality,” Thornburgh said in announcing the two indictments.

Despite the progress, however, Thornburgh held out little hope that substantial amounts of the money lost in savings and loan fraud will be recovered.

“It’ll be a very great accomplishment if we were to get 5% to 10% back,” he said, echoing remarks made to Congress last week by L. William Seidman, the top thrift regulator.

Thornburgh said that one place investigators are looking for S&L; loot is in the offshore havens used by money launderers.

“It’s clear that some of these monies have moved offshore,” he said. “Obviously these guys don’t publish profit-and-loss statements, so we don’t know exactly what it is. But we want to make sure we look at that as a potential source of recoveries.”

Thornburgh said federal authorities hope to win the cooperation of bankers in Switzerland, Luxembourg, the Cayman Islands and other such havens. But he said foreign officials are less cooperative in prosecuting such crimes than they are in pursuing money-laundering cases.

Separately, Thornburgh said he had not meant to exonerate Neil Bush when he told a television interviewer last month that he had not seen any evidence of criminal wrongdoing on Neil Bush’s part.

Instead, Thornburgh said, he merely meant to point out that the initial investigation of the case had turned up no allegations that would justify appointment of a special prosecutor to handle the case, as provided in current law.

As a director of Silverado Banking, Savings & Loan, which failed in 1988, Neil Bush helped obtain loans for a friend and business partner, in one case apparently without informing his fellow directors. Federal regulators have declared such conduct to be improper.

Thornburgh reiterated Tuesday that if further investigation unearths allegations of criminal wrongdoing in Neil Bush’s case, “they will be pursued and at that time there may have to be some consideration of the special prosecutor statute.”

Bush has denied any wrongdoing, and no one has been charged with a crime in connection with the collapse of Silverado.