Cyprus FCU Sues CUMIS Over $450,000 Bond Claim
SALT LAKE CITY – Cyprus FCU is asking a federal court to enforce its bond with CUMIS Insurance Society which it believes entitles the credit union to reimbursement of $450,000 from employee malfeasance.
The credit union said the loss was the result of four employees ignoring its policy, which enabled a local businessman to kite checks between accounts. The credit union in its suit, filed in U.S. District Court for the District of Utah, said its policy requires checks payable to non-natural persons be taken for deposit only to an account with the same owner as the payee of the check.
The suit claims that CUMIS, a unit of CUNA Mutual Group, has failed to investigate or pay its claim.
CUMIS declined comment. “Because litigation is pending, we cannot comment on this specific case; however, it is CUNA Mutual's commitment to its customers to always pay claims according to the terms of the contract,” said Phil Tschudy, spokesman for the credit union insurer.
An attorney for Cyprus FCU did not return a phone call seeking comment.