BOSTON – Lawyers for Carol Aranjo, the one-time chairman of the National Federation of Community Development CUs, last week asked a federal appeals court to overturn her 2008 conviction on fraud charges in connection with the failure of the $7 million credit union she ran, saying federal prosecutors intentionally created an all-white jury in the case.
In oral arguments before the U.S. Court of Appeals for the First Circuit last week, lawyers representing the former president of D. Edward Wells FCU, in Springfield, Mass., and her husband, Alphonso Smith, also convicted in the case, said the lower court erred when it allowed the government’s peremptory challenge disqualifying the only African-American in the jury panel, creating an all-white 12-member jury for the two African-American defendants.
"What we are saying, is you cannot exercise a peremptory challenge on the basis of race or gender," Judith Meisner, a public defendant representing the former credit union CEO, told The Credit Union Journal yesterday. Previous Supreme Court rulings have found such peremptory challenges to contain an "inference of racial motivation" according to Meisner.
Aranjo, 69, is serving a 54-month sentence in federal prison in Arizona. Her husband, Smith, now 71, has been released from prison after serving one year and one day behind bars. Their son, Douglas Smith, a local businessman, also was charged with obtaining fraudulent loans but died in a freak boating accident as the case was proceeding.
Aranjo, who served a chairman of the National Federation of CDCUs in 1998 and 1999 and was praised by the Clinton administration and members of Congress as a model of community development lenders, was convicted in March 2008 of a broad scheme of providing as much as $2 million in loans to family and friends, many of whom were ineligible borrowers and hiding the scheme. NCUA liquidated D. Edward Wells FCU, chartered in 1959 in a church basement, in February 2003 at a cost of as much as $5 million to the National CU Share Insurance Fund after all the losses were totaled.
A separate civil suit brought by NCUA against Aranjo, Smith and several of the borrowers was dismissed on the day of the criminal conviction.
