American Savings Bank may end up footing the costly legal bills for Mainland attorneys defending the bank from charges that it coverd up fraud.

Lloyd’s of London is refusing to pay for most of the attorneys fees for prominent Washington, D.C. lawyer Michael Bromwich and the local law firm of Torkildson Katz Moore & Herrington.

According to a lawsuit filed by American Savings in state Circuit Court last month, Lloyd’s is balking at paying for the audit expenses and most of the million-dollar settlements paid to 93-year-old customer Ada Lim and the bank’s former security director Bert Corniel.

It’s not clear whether Lloyd’s is picking up the legal tab for San Francisco lawyer Walter Brown, the independent counsel retained by the audit committee of American Savings’ parent company Hawaiian Electric Industries Inc. to look into the Ada Lim matter.

Brown’s report to HEI’s board has never been made public.

A spokesman for American Savings declined comment.

The Advertiser previously reported that American Savings paid Lim and Corniel more than $1 million each to settle their lawsuits alleging that a former bank manager, Marylin Demotta, took hundreds of thousands of dollars from Lim.

Demotta was fired and was indicted last November by a federal grand jury.

Her case goes to trial in July but federal prosecutors are continuing their investigation into the bank’s alleged conduct.

American Savings has denied the cover-up allegations and has said that it fired Demotta immediately.

These lawyers don’t come cheap.

Bromwich, a former inspector general for the Justice Department, is a partner in the Washington, D.C. firm of Fried, Frank, Harris, Shriver & Jacobson LLP.

He is the author of a 1997 report that criticized the FBI’s crime lab for its handling of evidence in the Oklahoma bombing case.
He also was part of the federal government’s legal team that prosecuted Iran-Contra figure Oliver North in the late 1980s.

Brown, a partner in the San Francisco office of Orrick, Herrington & Sutcliffe LLP, specializes in white-collar criminal defense cases.

Brown represented former McKesson Corp. Chief Financial Officer Richard Hawkins, who was acquitted in 2005 on federal charges that he inflated revenues for the San Francisco-based pharmaceutical distributor.