CEO Jailed For 9 Years In Family Fraud

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WHEELING, W.V. – The CEO of Center Valley FCU was sentenced this afternoon to nine years behind bars and ordered to pay $4.9 million restitution for a fraud that drained as much as $9 million from the credit union for the purchase of real estate, cars and other goods for her, her husband and children, believed to be the biggest family fraud ever among credit unions.
Bernie Metz, 59, pleaded guilty a year ago to embezzlement and money laundering charges in the case, which bankrupted the one-time $17 million Wheeling credit union, chartered in 1975 to serve employees of the Ohio Valley Medical Center, then expanded to serve the underserved area in south Wheeling.
Metz confessed to siphoning credit union funds and using them to finance her family’s lavish living expenses, which included the purchase of and operation of their business, the Roadworthy Restaurant and Tavern in West Liberty, W.V.  After her arrest in July 2009, authorities seized six vehicles (including two Mercedes); three accounts at Progressive Bank; the Metz residence in Valley Grove, W.V., and the Roadworthy Restaurant, all of which were financed with credit union funds.
Metz’s husband and two adult children were also implicated in the fraud but were not charged under a plea agreement with the one-time CEO.
Prosecutors said Metz earned about $60,000 annually at the time of her crimes, yet she and her husband  spent millions. 
The books indicated the credit union’s 3,150 members had more than $17 million on deposit, but NCUA, which liquidated the credit union in February 2009, was only able to find about $8 million. They believe the rest was stolen by Metz. The restitution was set at $4.9 million because that is all that prosecutors could prove that Metz stole
Evidence in the case showed that Metz wrote a check from the credit union's general fund for $200,000 payable to the construction company building the Roadworthy. She forged a teller's signature to authorize the check.
Additional evidence showed Metz made unauthorized withdrawals from members' accounts, wrote checks on the credit union account for personal expenses for herself and her family members and made false entries showing withdrawals by members from their accounts.
A recent report by the NCUA Office of Inspector General found little evidence that the credit union’s supervisory committee did any work other than to contract for an annual external audit. NCUA examiners and the Inspector General found the credit union’s internal controls were “non-existent.” The lax oversight facilitated in one of the biggest credit union CEO embezzlements ever, which went undetected by NCUA examiners for as long as four years, according to the new report. Among the red flags NCUA discovered were: missing deposits/shares; back-dated transactions; CD discrepancies; and, fraudulent loans, deposits and withdrawals.

NCUA estimates the failure of Center Valley will cost the National CU Share Insurance Fund $16.4 million to resolve.  

WHEELING, W.V. – The former CEO of defunct Center Valley FCU was sentenced this afternoon to nine years behind bars and ordered to pay $4.9 million restitution for a fraud that drained as much as $9 million from the credit union for the purchase of real estate, cars and other goods for her, her husband and children, believed to be the biggest family fraud ever among credit unions.

Bernie Metz, 59, pleaded guilty a year ago to embezzlement and money laundering charges in the case, which bankrupted the one-time $17 million Wheeling credit union, chartered in 1975 to serve employees of the Ohio Valley Medical Center, then expanded to serve the underserved area in south Wheeling.

Metz confessed to siphoning credit union funds and using them to finance her family’s lavish living expenses, which included the purchase of and operation of their business, the Roadworthy Restaurant and Tavern in West Liberty, W.V.  After her arrest in July 2009, authorities seized six vehicles (including two Mercedes); three accounts at Progressive Bank; the Metz residence in Valley Grove, W.V., and the Roadworthy Restaurant, all of which were financed with credit union funds.

Metz’s husband and two adult children were also implicated in the fraud but were not charged under a plea agreement with the one-time CEO.

Prosecutors said Metz earned about $60,000 annually at the time of her crimes, yet she and her husband  spent millions. 

The books indicated the credit union’s 3,150 members had more than $17 million on deposit, but NCUA, which liquidated the credit union in February 2009, was only able to find about $8 million. They believe the rest was stolen by Metz. The restitution was set at $4.9 million because that is all that prosecutors could prove that Metz stole

Evidence in the case showed that Metz wrote a check from the credit union's general fund for $200,000 payable to the construction company building the Roadworthy. She forged a teller's signature to authorize the check.

Additional evidence showed Metz made unauthorized withdrawals from members' accounts, wrote checks on the credit union account for personal expenses for herself and her family members and made false entries showing withdrawals by members from their accounts.

A recent report by the NCUA Office of Inspector General found little evidence that the credit union’s supervisory committee did any work other than to contract for an annual external audit. NCUA examiners and the Inspector General found the credit union’s internal controls were “non-existent.” The lax oversight facilitated in one of the biggest credit union CEO embezzlements ever, which went undetected by NCUA examiners for as long as four years, according to the new report. Among the red flags NCUA discovered were: missing deposits/shares; back-dated transactions; CD discrepancies; and, fraudulent loans, deposits and withdrawals.

NCUA estimates the failure of Center Valley will cost the National CU Share Insurance Fund $16.4 million to resolve. 

 

 

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