Audit Critical of Funds That Went Into Failed Credit Union

HARRISBURG, Penn. – A federal audit report has concluded the Harrisburg Housing Authority improperly used $834,969 from its operating funds to open and support Greater Harrisburg Community Credit Union. The report further recommends the agency repay at least some of the money from non-federal funds. The report states that a conflict of interest was created when the Housing Authority named its own executive director, Carl Payne, as CEO of the credit union when it opened in April of 2001 to serve an underserved community. The credit union was shuttered by regulators in 2006 following losses of $264,000 during the first nine months of 2005. Earlier this year, Payne pleaded not guilty to federal charges of obstructing a grand jury investigation of the diversion of federal housing money to the credit union.