HOUSTON -
A federal court ordered the family of the former manager of ILA24 FCU to pay NCUA $2.8 million they stole from the now-defunct CU after the manager, Esther Pelton, was incapacitated by Alzheimer’s disease.
As Pelton’s health declined her daughter, Melinda Andrews, became de facto manager of the $5-million labor union CU and led a so-called lapping scheme–through which the family drained an estimated $4.3 million, bankrupting the tiny CU in 2006, according to court documents.
Pelton ran ILA24 FCU from 1967 to 2005, but by 1999 she began showing the effects of Alzheimer’s, at which point her daughter took over management of the credit union.
Andrews, her husband, Danny Andrews, their daughter, Tiffany Simpson, their son, Steven Andrews, and his wife, Patricia Andrews, arranged a sophisticated scheme by which they allegedly enriched themselves through loans credited to other members, then paid off the loans using other members’ deposits. By February 2006 there were more than 100 loans totaling $2.5 million credited to members who had no idea their accounts had been tapped into.
NCUA took over the credit union in July of 2006 and placed it into involuntary liquidation. (c) 2008 The Credit Union Journal and SourceMedia, Inc. All Rights Reserved. http://www.cujournal.com http://www.sourcemedia.com
