The buzz ricochets like a hot stock tip from table to table on the spectacular dining terrace of the $600 million Phoenician resort hotel in Scottsdale, Arizona. Charles H. Keating Jr., his head held high, his gangly 6 ft. 5 in. frame clad in rolled-up blue jeans and a Windbreaker, strides in, startling a middle-aged couple at lunch. The man, still in golf togs, drops a steak knife and says, "Edith, I can't believe he's out of prison; it's the guy who built this hotel."
Oblivious to the commotion he is causing, Keating table-hops and shakes hands with hotel staff. The guy acts as if he still owns the joint, as if he's still a Southwestern Gatsby peddling hundreds of millions of dollars of soon-to-be-worthless junk bonds to elderly Southern Californians. Can Keating still summon U.S. Senators--the Keating Five--to his defense at the touch of a phone pad? Or procure the services of top law and accounting firms? Or hire Alan Greenspan, who, before he became Fed chairman, gushed over the "outstanding success" of Lincoln Savings & Loan, Keating's star asset? No. All that happened before Lincoln crashed in a $3.4 billion pile of broken dreams, the most costly savings and loan failure in U.S. history.
What seems forgotten now, though, is that he just got out of the joint, the Federal Correctional Institution in Tucson, improbably freed after serving less than five years of a 12 1/2-year sentence. Since Keating walked, at age 73, prosecutors have been beside themselves to reimprison or retry him. In the meantime, he lives in near seclusion, although he recently met with TIME for two days of interviews that offer his first detailed account of his case since his release. Tan, relaxed and defiant, he says he is not going to cop a plea, say, for time served: "I didn't come this far to cut a deal. My case will be fought on the merits, and I am completely innocent."
It sure didn't look that way in 1989, after Lincoln bit the desert dust and Keating faced a series of highly publicized trials. Prosecutors vilified him as a high-living, white-collar sociopath, and he was convicted on no less than 90 federal and state counts of fraud, racketeering and conspiracy. The main charges: that he directed the sale of fraudulently marketed junk bonds to tens of thousands of Lincoln customers and that he orchestrated a series of sham real estate transactions to inflate Lincoln's profits. Packed off to prison in handcuffs and chains under the glare of TV cameras, he became one of the most reviled white-collar criminals in America, the spat-upon face of a crisis that cost nearly $500 billion.