Straw Borrower Admits to Bank Fraud Charges : Thrift: In an apparent plea bargain, a defendant says he was part of a Consolidated Savings plan to funnel money to an Anaheim fireworks firm.

LOS ANGELES —  A Laguna Beach man, one of nine indicted on charges of defrauding Consolidated Savings Bank in Irvine, pleaded guilty Monday to three of six counts against him, apparently as part of an agreement to testify against the others.

By admitting that he gave false information on a loan application, James Charles Allee, 36, acknowledged that he was a straw borrower in a scheme by the defunct thrift’s owner, Robert A. Ferrante, and its operators to funnel funds to Pyrotronics Inc., the one-time Anaheim fireworks company.

Allee faces a maximum of six years in prison and $750,000 in fines when he is sentenced sometime after the trial of the other eight defendants in October.

The plea bargain is significant because it is the first crack in the defense, said Assistant U.S. Atty. Gregory Schetina.

But Ferrante’s attorney, Brian C. Lysaght, discounted Allee’s significance to the government, saying he would not be a credible witness.

“I don’t think anybody was terribly surprised,” Lysaght said. “Allee has a number of personal difficulties with the government and will do pretty much whatever the government asks him to do.” He would not elaborate on those difficulties.

Allee’s lawyer, Michael Brennan, could not be reached for comment.

Lysaght denied that there ever was any illegal scheme to divert funds to Pyrotronics, once the premier manufacturer of so-called safe and sane fireworks. The company was owned by W. Patrick Moriarty, who was convicted in March, 1985, of political corruption charges and served 29 months of a seven-year sentence.

Pyrotronics typically took out a large loan in January and paid it off with the proceeds of fireworks sales in July. But the company’s lender pulled out when Moriarty got into legal trouble.

Ferrante gained effective control over Pyrotronics, the indictment charges, and used Consolidated to lend the firm $1.6 million in 1986. The loan violated savings and loan regulations that limited the amount a thrift could lend to one borrower and to insiders, the indictment charges.

The indictment accuses Ferrante of using Allee and other straw borrowers to get the money to Pyrotronics. In addition, Consolidated made sham payments under fraudulent invoices from corporations controlled by Ferrante and another insider, and those payments were funneled to Pyrotronics, according to the indictment.

Regulators seized Consolidated in May, 1986, and Pyrotronics eventually went bankrupt. The government has since recovered much of the money.

The 31-count indictment also charges Ferrante and others with defrauding Consolidated by conspiring with Charles J. Bazarian of Oklahoma to funnel $9.5 million through Bazarian’s firm to a partnership in which Ferrante had a stake.

In the last few years, Bazarian has pleaded guilty in separate cases to defrauding three financial institutions, including Consolidated, and is serving a four-year prison term.

Also, in recent months, two others--Harlan Wolfe, 61, of Glendale and Phil G. Gilbert, 34, of Pacific Palisades--have pleaded guilty to charges they defrauded Consolidated.