One week after regulators uncovered some financial irregularities at its operations, Clarkston Brandon Community Credit Union (CBCCU) said its branches are "open and fully functional" and its employees are "ready to meet" members' needs.
Early last week, the leadership of the $69-million Clarkston, Mich.-based credit union became aware of "potentially serious" accounting irregularities uncovered during a routine visit by its state regulator, the Department of Insurance and Financial Services (DIFS). CBCCU explained that after then-Chief Financial Officer Michael LaJoice was confronted with the "errors," he failed to show up for work the following day and was immediately terminated.
LaJoice turned himself in to Oakland County authorities Jan. 6, having admitted to embezzling from the credit union over the course of his employment.
According to the Oakland County Sherrif's office, 36-year-old Lajoice is being held at the Oakland County Jail on $1-million bond.
Now, an investigation is underway by the Oakland County Sheriff, state regulators and NCUA to learn the "full extent of the crime and how it remained undetected."
The credit union also said it is "working around the clock" in full cooperation with authorities to see that every detail of this "egregious situation" is revealed, and justice is served.
In a statement, the credit union further said it is "appalled and dismayed" by this situation – while adding that during LaJoice's tenure, CBCCU underwent regular examinations and audits that were conducted in accordance with the Michigan Credit Union Act.
In a statement emailed to Credit Union Journal, CBCCU's CEO Donna Bullard said that LaJoice "was employed with the credit union since 2003. The extent of the embezzlement is part of the ongoing investigation."
According to local media reports, LaJoice admitted to police to stealing $20 million over a 12-year period at the credit union. Those reports also suggested that he lived a very wealthy lifestyle that far exceeded his salary at the credit union.
The Michigan Credit Union League & Affiliates (MCUL) commented that it appeared that local media was tipped off before regulators were able to fully investigate the case. When MCUL learned of LaJoice's embezzlement confession, it "immediately reached out to the credit union and also contacted… the Department of Insurance and Financial Services."
MCUL added that it has offered to help both CBCCU and DIFS with the investigation "in any way it can."
"While internal fraud and embezzlement cases are very rare at credit unions and banks, they are a reality for any business that deals with people's money," MCUL president and CEO Dave Adams said in a statement. "That's why credit unions and banks are closely regulated, receive annual independent audits, and carry insurance coverage for these incidents."
Adams further noted that when such "rare" incidents of embezzlement occur, it's important for the public to understand just how many safeguards are in place for the protection of depositors' funds.
Such controls, he added include: the requirement for Michigan credit unions to have federal deposit insurance; the requirement to conduct third-party, independent audits at least annually; the requirement to receive at least one annual examination from state and/or federal regulators; and the requirement to have fidelity bonds that protect against fraud and embezzlement losses
"Unfortunately, even with all of these controls, there will be occasional creative schemes that bypass all of these controls, resulting in losses to a credit union or bank," Adams added. "Undoubtedly, CBCCU officials will cooperate fully with regulators and law enforcement officials to fully understand what happened and what can be learned for future prevention of such unfortunate incidents."
According to LaJoice's LinkedIn account, aside from his (now former) position at CBCCU, he is also affiliated with various other local business entities – including serving as president of LaJoice Properties LLC, president of the Chassé Ballroom and Latin Dance Studio; and president and CEO of LaJoice Enterprises Inc.
The Facebook page for the Dance Studio noted: "Please be advised that until further notice Chasse Ballroom and Latin Dance Studio will be closed."
