U.S.

Department of Justice D J United States Attorney Eastern District of California 555 Capitol Mall, Suite 1550 Sacramento, California 95814 Mailing Address: 650 Capitol Mall Sacramento, California

916/554-2700 Fax 916/554-2100

95814

November 22, 1995 NEWS RELEASE For Immediate Release Monday, November 20, 1995 SAVINGS AND LOAN SWINDLER SENTENCED TO 7 YEARS IN PRISON FOR FAILURE TO PAY COURT ORDERED RESTITUTION SACRAMENTO, CALIFORNIA -- U.S. Attorney Charles J. Stevens announced today that THOMAS E. NEVIS,53, of Yuba City, California, was sentenced last Thursday to seven years in prison and restitution in the amount of $2 million as a result of the revocation of his probation for willfully failing to pay restitution to the Federal Deposit Insurance Corporation (FDIC). NEVIS was remanded immediately to the custody of the Bureau of Prisons. NEVIS was convicted in 1989 of 24 felony bank fraud charges in the District of Oregon arising from the collapse of State Federal Savings and Loan of Corvallis. He initially was sentenced to a term of imprisonment for two years, to be followed by probation for a period of five years, with restitution in the amount of $2 million to be paid in annual installments of $400,000 as a condition of probation. In 1991, NEVIS' sentence was reduced to imprisonment in a work release facility for six months, solely and exclusively to allow him to work in order to pay the $2 million restitution. His first installment of $400,000 was due in June, 1993. When he failed to make his June, 1993 installment payment, the FDIC immediately began civil proceedings to collect the restitution. Shortly thereafter, the Justice Department opened an investigation to enforce the restitution order. A petition to revoke NEVIS' probation was filed in August, 1994. NEVIS also failed to pay restitution in June, 1994 and June, 1995. Following a 5 day hearing in April, 1995 and post-trial briefing by the parties, NEVIS' probation was revoked on September 14, 1995 and the matter set for imposition of judgment and sentence yesterday.

NEVIS also waived indictment and pleaded guilty to one count of conspiracy to defraud the United States by obstructing and impeding the Internal Revenue Service in the assessment and collection of tax (Klein conspiracy), in violation of Title 18, United States Code, Section 371, and one count of making and subscribing a materially false corporation tax return, in violation of Title 26, United States Code, Section 7206(1). NEVIS stipulated that the amount of underreported income combined with the fictitious capital losses exceeded $1,208,000, with a net tax loss of between $411,000 and $550,000. Sentencing in the criminal tax case is on February 1, 1996. In addition, the United States filed a civil suit against NEVIS, Goshute Corporation, NBC Leasing, Inc. and South Butte Warehouse, Inc. seeking a declaratory judgment that Goshute, NBC and South Butte had operated as alter ego nominees for defendant NEVIS, and for money damages in the amount of $36,000,000 due to fraudulent transfers of assets to them by NEVIS to defeat collection of the restitution by the FDIC. The civil suit also asked for the appointment of a receiver to liquidate the nominees and pay off creditors. The United States also sought an injunction to prohibit NEVIS from conducting business in any nominee names, from holding title to property in any name other than his own and from engaging in any scheme to defraud the FDIC from the collection of the $36,000,000 judgments by means of mail or wire fraud, or by making false statements. Civil judgment was imposed yesterday upon the corporate nominees in the amount of $36,000,000 and they were placed into receivership. Nevis was permanently enjoined from conducting business activities in the name of nominees, or holding property in any name other than his own, or engaging in any schemes to defraud the FDIC from the collection of their judgments by way of mail fraud, wire fraud or false statements. This case was investigated by Special Agent Bridgett O'Keeffe of the Criminal Investigation Division of the Internal Revenue Service. These cases were prosecuted by assistant U.S. Attorney Robert M. Twiss.