PITTSBURGH-A well-known local investment broker was arrested and charged with a long-running Ponzi scheme that sold three local credit unions $2.1 million in fictitious CDs.
The broker, Eugene Miley, pocketed most of the funds and used the remainder to pay interest on principal on the oldest "CDs" to make the scheme appear legitimate, the features of a classic Ponzi scheme, according to the charges.
Authorities claim Miley, 58, sold the phony CDs to Moonlight CU, in Worthington ($1.4 million worth); VANtage Trust CU, in Wilkes-Barre ($594,000) worth) and Stanwood Area CU, in New Stanton ($99,000 worth).
Miley told investigators he was able to continue the ruse until January when Mooonlight CU requested redemption of the CDs. Until then, whenever anyone asked for redemption he would just sell more phony CDs.
Miley allegedly used long-standing relationships with officials at the three CUs to sell them various high-interest CDs, authorities claim. A preliminary hearing is set for Nov. 20.
