Word: centrust
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...First, some of the S&L assets are good. For example: the home of David Paul, until recently chairman of Miami's CenTrust Savings. CenTrust is the thrift that it's estimated will cost taxpayers $2 billion; Paul is the man who bought a $13 million Rubens for the bank but hung it in his home for safekeeping. And what a home! I was only allowed to see the guesthouse -- 8,200 sq. ft. -- which the real estate agent thought was unoccupied. Instead, we found toddlers downstairs with a nanny and, upstairs, a freshly unmade bed with a large...
Bathed every evening in colored lights and gleaming like a stack of silver dollars, the 48-story CenTrust Tower became the pre-eminent landmark on Miami's skyline in the booming 1980s. The tower was visual testimony to the success of CenTrust Bank, which grew out of near failure seven years ago into the largest savings and loan in the Southeast (peak assets in 1989: $11 billion). But the building took on a gloomier symbolism last month when federal regulators seized the now insolvent thrift and ousted its top executives. As the Government conducts a bailout that could cost...
...real estate developer with a $52 million offer to buy the faltering Dade Savings and Loan (assets: $2.2 billion). State regulators were happy someone was willing to take over the sick thrift. Paul renamed the S&L and within a few years sent its profits zooming. His method: investing CenTrust's assets heavily in junk bonds, many of which he bought from Michael Milken at Drexel Burnham Lambert. By the late 1980s the payoff from CenTrust's $1.35 billion portfolio of junk made the S&L the region's most profitable thrift. But as the market value of junk bonds...
...CenTrust's hefty contributions to charity helped make Paul a member of the city's elite. And his opulent indulgences -- an estate on exclusive La Gorce Island, a 96-ft. yacht and a chauffeured limousine -- drew the attention of state banking regulators. Federal investigators are now probing whether Paul illegally diverted corporate funds for his personal use. The list of his suspect expenses totals more than $40 million. Paul has denied any wrongdoing, but he will find few sympathizers in Miami. "David Paul saw a good deal, set it up and milked it excessively," says Paul Bauer, a local...