Investigation of Walsh Focuses on Kickbacks

Federal authorities are refocusing their investigation of indicted City Councillor William H. Walsh to examine "kickbacks" made to the bankers who funded his condominium projects, The Boston Globe reported yesterday.

Walsh--indicted in October for bank fraud and conspiracy--created trusts to pay off his bankers, according to the new allegations.

The FBI probe will now also concentrate on allegations of collusion between the bankers and Walsh, The Globe reported.

But the fourth-term councillor denied the new accusations last night saying they were "emphatically, unequivocally and any other word you want to use that means untrue."

Walsh allegedly diverted about $500,000 into the two trusts in 1986 to give to associates and bankers, The Globe reported.

Federal law prohibits giving or promising anything of value to a bank official involved in a business transaction.

The councillor, however, denied that the trusts provided funds to pay off business associates. The two trusts, "Banker Vics" and "Robin Hood," were established to benefit charities and under-paid employees, Walsh said.

The councillor said Robin Hood was earmarked to compensate workers who were not paid overtime for extra hours spent on projects. Banker Vics wasfor Volunteer International Christian Services(VICS), a charity headed by a long-time friend ofthe family.

Walsh, a long-time supporter of developers inthe city, also said he knew nothing of the newcharges or of the new probe. He added that hisinvestors were aware of the trusts and theirpurposes.

"Of course they knew," Walsh said. "They satdown with me to decide which employee got what."

The FBI could not be reached for comment.Margaret R. Hinkle, the attorney in charge of theNew England Bank Fraud Task Force, did not returnphone calls.

Walsh, along with 18 others, was indicted inOctober for allegedly defrauding the Dime SavingsBank of New York by falsifying documents to securemortgage payments for real estate projects.

No trial date has been set so far, according toWalsh

Walsh, a long-time supporter of developers inthe city, also said he knew nothing of the newcharges or of the new probe. He added that hisinvestors were aware of the trusts and theirpurposes.

"Of course they knew," Walsh said. "They satdown with me to decide which employee got what."

The FBI could not be reached for comment.Margaret R. Hinkle, the attorney in charge of theNew England Bank Fraud Task Force, did not returnphone calls.

Walsh, along with 18 others, was indicted inOctober for allegedly defrauding the Dime SavingsBank of New York by falsifying documents to securemortgage payments for real estate projects.

No trial date has been set so far, according toWalsh