CDCU Figure Guilty of Fraud Charges

SPRINGFIELD, Mass.–Former D. Edward Wells FCU President Carol Aranjo, a one-time national spokesman for community development financial institutions, was found guilty yesterday of conspiracy and embezzlement charges in the 2003 failure of the prominent CDCU.A federal jury found the 66-year-old Aranjo and her husband Alphonso Smith, 67, conspired to use the assets of the $7-million credit union, making improper loans to family members and cronies and causing a loss of more than $2.2 million to the 44-year-old institution.The former CDCU figure was convicted of 16 counts of embezzlement, four counts of filing false tax returns, 13 counts of bank fraud, six counts of filing false entries and four counts of obstruction of a federal examiner.Their son, Douglas Smith, was also charged in the case but he drowned to death in a tragic boating accident last November, as the trial was nearing.Aranjo, who came to national prominence in the late 1990s as chairman of the National Federation of CDCUs, now faces years in prison when she is sentenced in June.Aranjo and her husband were accused of using credit union funds to buy a sauna and a timeshare in Mexico, and of financing both her husband’s and her son’s businesses, as well as to pay of personal debts.D. Edward Wells was taken over in 2003 by NCUA and liquidated, with its remnants sold to another local credit union. The NCUA takeover followed several years of battles with NCUA and its examiners. At one point, Aranjo filed a restraining order to keep NCUA examiners from the credit union, but it was thrown out of court.Yesterday’s jury verdict came after a five-week trial during which 29 witnesses testified.