CDCU Figure Pleads Innocent to Fraud Charges

HARRISBURG, Pa. – The former head of the Harrisburg Housing Authority and CEO of Greater Harrisburg Community CU pleaded not guilty Tuesday to charges of lying to a grand jurt probing the diversion of $500,000 in federal housing money to the now-failed community development credit union. Carl Payne, 66, is charged in a federal indictment with creating and backdating documents to obstruct a grand jury probe into the diversion of the housing funds. Payne is also charged with lying about receiving $134,000 from the housing authority for his work running the tiny CDCU. Greater Harrisburg Community CU was chartered to much fanfare in 2001 to serve low-income residents surrounding the state capital, but was declared insolvent under the weight of bad loans in February 2006 and shuttered by NCUA. The credit union reported more than $265,000 in losses on just $1.6 million in assets for the first nine months of 2005.