BEAVER, Penn.-State regulators charged a local CD broker for credit unions with operating a Ponzi scheme which allegedly defrauded two local credit unions out of almost $200,000 last month.
The Pennsylvania Securities Commission charged last week that Eugene Miley and his firm, Miley Financial Services, which has been brokering CDs to credit unions since 1993, misappropriated some of the funds or used funds to make monthly interest payments to other credit union investors, which is known as a Ponzi scheme.
In those cases, the commission charged, Miley would send phony confirmation letters to his clients, indicating he had bought a CD with their money.
The commission said two credit unions, which it would not identify, tried to collect their principal investments, each totaling $99,000, when they matured last month, but Miley didn't pay them.
No one from Miley Financial Services was available for comment.
