GLEN ROCK, N.J. – The former CEO of defunct Peoples First Choice FCU has agreed to pay NCUA $570,000 to settle claims in a civil lawsuit alleging that insider dealings by him and others sank the one-time $25 million credit union.
Under the settlement, NCUA will dismiss the civil suit against Henry Slootmaker, a former town councilman who headed the credit union until it was shuttered by NCUA. Slootmaker agreed to an NCUA civil prohibition order in December barring him from working for any federally insured credit union or bank.
Faced with millions of dollars in losses, NCUA took over the 55-year-old credit union in June 2007, then liquidated it in May 2008 at a loss of $5 million to the National CU Share Insurance Fund.
The NCUA suit claimed that Slootmaker and the others siphoned millions of dollars they purportedly had lent to members for a mini bus business that eventually ended up in business accounts controlled by Slootmaker.
The suit claimed the insiders approved numerous loans without the knowledge of the account holders; using fictitious names and collateral already pledged for other loans, then transferred the loan proceeds to accounts they controlled.
In many instances, companies they controlled repossessed mini buses, then resold the buses, with Slootmaker and others pocketing the funds themselves, according to the NCUA suit. On several occasions, according to NCUA, the loan proceeds went directly to companies the former executives controlled.
A lawyer for Slootmaker did not return a phone call seeking comment.
An NCUA spokesman declined to comment, saying "we’ll let the court documents speak for themselves."
