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The letter opened the door for Lynam to argue that Bank One would have extended the loan to Symington no matter what the financial statement said because the bank knew Symington was in deep financial trouble and that Symington had made earlier payments to reduce the loan.

The jury, Lynam reminded Strand, was deadlocked on whether Symington submitted a false financial statement to the bank when he first obtained the loan. Therefore, Lynam said, there is no proof that Symington's May 14, 1991, financial statement contributed in any way to the $780,000 loss.

Lynam next moved to the four Dai-Ichi Kangyo Bank guilty verdicts.
The jury found Symington guilty of submitting three false statements to DKB in 1991 and 1992 to obtain money--in the form of "draws"--to pay for construction of the second office tower at the Camelback Esplanade. The jury also said Symington was guilty of sending DKB a letter in which he falsely represented that his net worth as of December 31, 1990, had been $5.4 million.

In his presentence report, the probation officer says that DKB claims to have lost $38 million as a result of its Esplanade loans to Symington. The probation officer concluded Symington is responsible for $9 million of the loss, which is the amount Symington guaranteed to repay.

Lynam, however, told the court the $38 million loss was related to DKB's overall investment in the Esplanade, which included two office towers and a hotel. Symington, Lynam said, was found guilty only for his role in obtaining routine construction disbursements for the second office tower as it was nearing completion. Most of the money from the cash disbursements was returned to DKB in the form of interest payments and paid to contractors.

Furthermore, Lynam said the original loan for that office tower was executed in 1988, three years before Symington's false statements were made.

"And," Lynam said, "I think it's significant to point out that . . . there is no charge of fraud in DKB's decision to make" the Esplanade loans.

As he did with Valley National Bank, Lynam turned to a letter from DKB to support his case. The letter, Lynam said, states that "DKB takes no position on whether Mr. Symington's conduct caused the loss to DKB." While not as strong as Welborn's letter, DKB's letter was nonetheless helpful.

The actual cause of DKB's loss in the Esplanade, Lynam told the court, had nothing to do with Symington submitting false statements in 1991 and 1992. Instead, the loss occurred when DKB's partner, Shimizu Construction Co., decided to sell the Esplanade for a huge loss in 1993.

"Mr. Symington shouldn't be sentenced because of Shimizu's decision to sell," Lynam said.

The remaining guilty charge stems from a $10 million loan a Symington partnership received for the Mercado retail center in downtown Phoenix. The jury found Symington guilty of wire fraud when he induced the pension funds to lend the money on June 29, 1990.

The probation officer concluded the pension funds lost $6.85 million because of Symington's fraud. The loss was determined by taking the difference between the $10 million loan and the value of the Mercado when the pension funds acquired it at a 1993 foreclosure sale conducted after Symington defaulted.

Symington had personally guaranteed repayment of the entire $10 million loan, but the probation officer capped the loss at $6.85 million.

Lynam, however, said the loan has not resulted in any loss to the pension funds because they still own the Mercado and the property has regained much of its value.

He presented the court an appraisal showing the Mercado and the land beneath it, which is owned by the City of Phoenix, to be currently worth $10 million.

"The loss can be reduced by the amount the lending institution has recovered or can expect to recover from the collateral," Lynam said.

Since the pension funds can expect to recover all of the money they loaned to Symington's partnership for the Mercado, Lynan said Symington's wire-fraud conviction has not resulted in any loss.

Convincing Strand that Symington's guilty verdicts caused no losses was just the beginning.

The prosecution and the probation officer claimed that Symington's guilty conduct carried over to his dealings with two other lenders, causing $6.1 million in losses, even though the jury was deadlocked or returned not guilty verdicts on the charges related to these lenders.

The not guilty and deadlocked charges were related to loans Symington's partnerships obtained from First Interstate Bank and Citicorp Real Estate Inc. and failed to repay.

Lynam argued that the government has not provided sufficient proof to show that Symington defrauded the lenders and is therefore responsible for their losses.

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John Dougherty
Contact: John Dougherty