SPRINGFIELD, Mass. – Carol Aranjo, the former president of D. Edward Wells FCU who rose to national prominence as a spokesman for community development credit unions, was sentenced yesterday to four-and-a-half years in prison and ordered to pay $1.4 million in restitution for an embezzlement scheme that sunk the 52-year-old institution almost five years ago.
Aranjo, 66, who became a national spokesman for community development banking as chairman of the National Federation of CDCUs in the 1990's, was convicted of 44 counts of embezzlement, conspiracy to embezzle, bank fraud, and filing false tax returns in the failure of the one-time $7 million credit union.
Aranjo's husband, Alphonso Smith, 68, who was convicted of 10 charges, was sentenced to a year and a day in prison.
Aranjo was convicted in March of a scheme to loot the credit union by approving loans to friends and cronies, including her husband and son Douglas Smith, 46. The case took a tragic turn last November when Douglas Smith drowned in the Chicopee River after a major rainstorm.
Faced with mounting losses from the scheme, NCUA took over, then liquidated the credit union in 2003 with a loss of more than $2.1 million to the National CU Share Insurance Fund.
The credit union was established in the basement of a church in 1959 to serve poor minorities in this working class city an hour west of Boston.
