Lincoln Savings and Loan : a Case Study

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Lincoln Savings & Loan | A Case Study | Jessica Merschdorf | Lincoln Savings and Loan Association was a modest Phoenix-based savings and loan bank that simply wanted to keep its reputation for being honest and humble. However, that mission was crumbled when Charles Keating, Jr. acquired Lincoln Savings and Loan Association in 1984. Keating went against his pledge to keep the original Lincoln management team, make sure residential home loans were the company’s principal line of business, and to not allow brokered deposits to expand the size of the company. Instead, he led Lincoln on a downward spiral, leaving behind a trail of scandal, fraud, and broken dreams. A combination of money and power can be a lethal cocktail, spinning a web of destruction and deceit. This is exactly what happened to Charles Keating, Jr. He believed that because he had money and political power, he could get away with misallocating assets, racketeering, and embezzling money from both shareholders and taxpayers. However, despite his powerful team of associates, his fictional empire came crashing down around him, bringing with it some of the largest accounting firms in the country as well as many influential and well-known politicians. Originally from Cincinnati, Ohio, Charles Humphrey Keating, Jr. had an accomplished career at the University of Cincinnati where he graduated with a degree in law. After retiring from the Navy, Keating dabbled in politics while practicing law and operating several small businesses (McEddy, 2012). In 1952, Charles Keating, Jr., his brother, and a friend from law school opened their own law firm, Keating, Muething, and Keating. Keating’s law firm took on a particular client by the name of Carl Lindner, Jr. Lindner was a businessman who was rapidly buying new businesses. Most of the businesses he was purchasing were in the real

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