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OTS MOVES FOR ENFORCEMENT OF KAYE SCHOLER SUBPOENAS

 OTS MOVES FOR ENFORCEMENT OF KAYE SCHOLER SUBPOENAS
 WASHINGTON, March 5 /PRNewswire/ -- The Office of Thrift


Supervision (OTS) filed a motion in federal court here late yesterday to have its administrative subpoenas enforced against the law firm of Kaye, Scholer, Fierman, Hays & Handler, its former managing partner, and two other attorneys.
 The attorneys are Peter M. Fishbein, former managing partner, partner Barry L. Willner, and former associate Kelly J. Newton.
 A hearing has been scheduled for Monday, March 9, in U.S. District Court for the District of Columbia. Kaye Scholer was counsel to Charles Keating's Lincoln Savings and Loan Association, Irvine, Calif. The thrift failed in 1989, at an estimated cost to taxpayers of not less than $2 billion.
 OTS wants documents and testimony from the respondents relating to their representation of former Lincoln employees in an investigation of Lincoln and its parent, American Continental Corporation, that the Federal Home Loan Bank Board conducted in 1987.
 This subpoena enforcement action is distinct from and raises matters other than the allegations made in the notice of charges OTS filed against the firm Monday, March 2. In that, OTS is seeking to bar the firm from representing federally insured depository institutions and $275 million in restitution.
 The subpoenas involved in the new action seek to require testimony and production of documents that Kaye Scholer asserts are protected by the attorney-client privilege. OTS contends in the action filed today that the documents and testimony in question are subject to the "crime fraud" exception to the attorney-client privilege.
 The "crime fraud" exception allows discovery of materials that would otherwise be protected by attorney-client privilege if the challenger produces "some evidence" to suggest that legal advice was sought for an illegal or improper objective, and that there is some relationship between the communications at issue and what may be a criminal violation.
 OTS charged, "There is ample evidence here of furtherance of crime or fraud."
 OTS served the subpoenas in August, October and November 1991. Kaye Scholer moved to quash its subpoena in October; the motion was denied by OTS in December. The individual attorneys declined to answer certain questions or supply documents, asserting attorney- client privilege.
 -0- 3/5/92
 /CONTACT: Thomas P. Mason of the Office of Thrift Supervision, 202-906-6677/ CO: Office of Thrift Supervision; Kaye, Scholer, Fierman, Hays
 & Handler ST: District of Columbia IN: SU:


DC-MH -- DC033 -- 5523 03/05/92 14:20 EST
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Date:Mar 5, 1992
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