A federal judge in North Carolina has rejected a request for an inquiry into allegations that Rep. Charles Taylor (R-N.C.) has been protected from prosecution during a criminal investigation of fraudulent loans arising out of a thrift owned by Taylor.

In May, attorneys for a lawyer who was convicted of participating in the loan fraud filed a motion seeking a hearing to examine why federal prosecutors have yet to question Taylor about the fraudulent loans. Key figures in the case have testified that Taylor played a major role in nearly every aspect of the operation of Blue Ridge Savings Bank, a thrift owned and operated by Taylor, who serves as chairman of the board.

Hayes Martin, the former president of Blue Ridge, and Charles Cagle, a political ally of Taylor’s, entered guilty pleas for their participation in the loan fraud. Both Martin and Cagle provided testimony pointing to Taylor’s knowledge of the fraudulent loans, which were apparently made as a way of avoiding a $500,000 cap on loans to an individual.

Forrest Ferrell, an attorney for a third man implicated in the loan fraud, Thomas W. Jones, told Roll Call in June that neither the FBI nor federal prosecutors has questioned Taylor. He alleged that senior Justice Department officials, including Attorney General John Ashcroft, were protecting Taylor, a powerful member of the House Appropriations Committee. Ferrell sought to have the judge presiding over Jones’ criminal trial conduct an evidentiary hearing to determine whether there was prosecutorial misconduct.

In a two-page order dated Aug. 8 but not disclosed until this week, U.S. District Judge Graham Mullen dismissed the request and ruled that Jones had received a fair trial.

“The Court concludes that there has been no showing that the Government singled him out for prosecution instead of others similarly situated, or that he was singled out based on an impermissible consideration. … Additionally, there is not indication that Defendant was prejudiced by the Government’s decision not to seek to prosecute Congressman Taylor,” Mullen wrote.

Taylor has retained a prominent Raleigh, N.C., criminal defense attorney but has said nothing publicly about the case. The attorney, Joseph Cheshire, told the Hendersonville Times-News last month that prosecutors tried to schedule a meeting with Taylor but that the meeting never developed.

Cheshire also castigated the two men who have implicated Taylor. “The statements that Mr. Martin made and Mr. Cagle made were the self-serving statements of desperate men trying to deflect their own wrongdoing on someone who had absolutely no knowledge they were doing something wrong,” Cheshire told the Hendersonville Times-News.