ASI FCU Members Charged In Hurricane Katrina Fraud

NEW ORLEANS–Nine members of ASI FCU were charged with intentionally overdrawing their accounts when the credit union was forced to go offline in the aftermath of Hurricane Katrina.As many as 10,000 of the credit union's members overdrew their accounts when the massive hurricane blew out the credit union';s systems and let members overdraw funds. But the nine charged last week were among the most egregious.Through debit transactions and withdrawals at ATMs–sometimes 10 or more a day–each of the defendants collected $7,000 to $48,000, according to federal indictments handed up last week.Authorities said more indictments are possible. The case is reminiscent of a similar fraud committed in the aftermath of 9/11 when 4,000 of members of nearby Municipal CU took advantage of the credit union going offline to overdraw their accounts by a total of $15 million.Immediately following Hurricane Katrina last year, ASI FCU CEO Audrey Cerise told The Credit Union Journal how the number of members who took advantage of the credit union after the storm broke her heart, but in subsequent follow-up interviews, Cerise indicated the credit union was making headway in contacting members and getting some of them to pay back the money they withdrew, noting that in many cases, it was done unintentionally.Even so, however, Cerise conceded that some of those overdraws clearly were done purposefully, and the credit union had to be able to show NCUA how it was recovering and mitigating some of those, and other storm-related losses.