State & LocaL
the Battalion Friday, June?, 1991
Bank officials plead
no contest to charges
High-risk customers forced to buy costly life insurance policies
AUSTIN (AP) — Officials of
ClayDesta National Bank of Mid
land pleaded no contest Thursday
to a misdemeanor charge of crimi
nally violating the state insurance
code in a scheme in which custom
ers seeking car loans were forced
to buy costly life insurance, Travis
County prosecutors said.
The bank, owned by defeated
Republican gubernatorial nominee
Clayton Williams, was ordered by
Travis County Court at Law Judge
David Puryear to pay $1.13 million
in restitution, plus a $500 fine and
court costs.
The sentence followed terms of
an agreement the bank negotiated
over several months with Travis
County officials.
ClayDesta pleaded no contest to
a misdemeanor charge of contract
ing with car loan broker Lloyd Wil
liams Jr. of Houston, who pros
ecutors said "unlawfully solicited,
marketed and required credit life
and disability insurance in hun
dreds of transactions" and was not
licensed to act as an insurance
agent.
Under the scheme, high-risk
customers were required to pur
chase expensive credit life insur
ance policies, underwritten by
Service Life & Casualty Insurance
Co. of Austin, as a condition of ob
taining car loans from ClayDesta,
said Travis County Attorney Ken
Oden, who prosecuted the case.
Such insurance would pay off
the loans if the buyer could not
pay because of illness or death.
State law allows a banker to re
quire such insurance, but it bars a
lender from dictating where the
insurance must be purchased.
The bank received 50 to 85 per
cent of the $900,000 in premium
payments, Oden said.
Some 986 people, mostly in met
ropolitan Dallas and Houston, re
ceived the insurance during the
approximately four months the
program was in operation from
October 1989 until it was ordered
stopped in February 1990, Oden
said. But he said the bank had
planned to "massively expand"
the loan program statewide.
"The purpose of it was to make
a lot of money, and it was making
a lot of money," Oden said.
Oden said Lloyd Williams, who
is not related to Clayton Williams,
was the first and largest insurance
broker involved in the bank's
credit life insurance program and
wrote about two-thirds of the poli
cies involved.
Two other brokers already have
been convicted in connection with
the case, Oden said. In addition,
several consumers have filed a
lawsuit against Service Life and
Casualty and Lloyd Williams.
Other entities, including the State
Board of Insurance, still are inves
tigating, Oden said.
Friends of Medical Sciences Library will hold book sale today in MSC
The Friends of the Medical Sciences Library of The used books will cover a variety of subjects
Texas A&M will host a book sale from 8 a.m. to related to biomedical or health sciences. For
2 p.m. today in the MSC. more information, call Cheryl Hanks at 845-
7438.
Center offers free course to improve Spanish business language skills
The Center for International Business Studies in
cooperation with Texas A&M's Classical and Mod
em Language Department is now offering an in
tensive eight-week language program entitled
"Commeraal and Cultural Spanish."
The new course, offered free of charge, is a non
credit class designed for individuals with some
knowledge of Spanish and who want to improve
their Spanish business language skills.
Classes will begin Monday and run through
Aug. 2, with sessions scheduled from noon to 1:30
p.m. Monday through Thursday. Registration
forms are available in 505 Blocker or by calling An
tonio Caraballo at 693-8335.
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404 University Dr. East • 846-8916
Scott Harrell, a high school student from Jayton,
drops into Cain pool early Wednesday afternoon. Har
rell and some of his friends are members of the 4-H
Club rifle team. A&M is hosting the 4-H Club conven
tion in Rudder Auditorium and the second floor of the
MSC. Jayton is halfway between Abilene and Lubbock.
Airport loses chance for jet plant
FORT WORTH (AP) — Alliance
Airport did not make the short list
of four cities being considered as
the site of a proposed $750 million
manufacturing facility for McDon
nell Douglas Corp.'s next-genera
tion passenger jet.
The cities still in the running for
Douglas Aircraft Co. are Kansas
City, Mo., Salt Lake City, Shreve
port, La. and Tulsa, Okla.
Douglas Aircraft, based in Long
Beach, Calif., is seeking a final as
sembly site for a new, wide-body
commercial airplane called the
MD-12X.
Officials for Douglas Aircraft,
the commercial aircraft division of
St. Louis-based McDonnell Doug
las, have said the plant eventually
would employ 5,000 people.
The proposed three-engine jet is
designed to travel 8,000 miles and
carry 375 passengers in a single
flight.
The Texas A&M University College of Liberal Arts Presents the
——y ^ "Humana Hospital - Brazos Valley
FtXASw / • Chamber Music Concerts
/ Monday Evening - June 10
rfMfoaf 7:30 pm - ■ Rudder Thea,re
(. y ^—7 PKOAKIi: A
uartel)
C
and Lawrence 'WfiecCer, vioCa
"As always, played
splendidly"
-The New York Times
'Jirst stnnrj quartet to establish residency
at an Llmerican university.
Performing works by r Bfocfi, Sibefius, atnd Dvorak.
Special parking for concerts is available in Houston Street, Lot 48
Tickets available at the MSC Box Office and Foley's.
Series Tickets (6 Concerts)
Adults - $30.00
Students and Senior
Citizens (60 and over) - $20.00
Individual Tickets
Adults - $8.00
Students and Senior
Citizens (60 and over) - $5.00
School district
to challenge
funding law
SAN ANTONIO (AP) — Alamo
Heights School District is joining
40 wealthy districts in challenging
the constitutionality of the state's
new education funding reform
law.
"I think it's ludicrous that an ex
emplary school district like Alamo
Heights is forced to cut its budget
and face a potential tax hike of as
much as 30 percent," said Alamo
Heights Superintendent Charles
Slater.
The district was stung for $3 mil
lion under the new law. It now has
a budget of $15 million and has en
acted about $1 million in budget
cuts. Among those cuts are layoffs
of 14 teachers and other instructio
nal personnel and 13 maintenance
workers.
Wealthy districts from around
the state filed the lawsuit May 20.
Alamo Heights trustees voted
late Tuesday to enter the suit.