HOUSTON -
As Pelton’s health declined her daughter, Melinda Andrews, became de facto manager of the $5-million labor union credit union and led a so-called lapping scheme–through which the family drained an estimated $4.3 million, bankrupting the tiny credit union in 2006, according to court documents.
Pelton ran the credit union from 1967 until 2005. Around 1999 she began showing the effects of Alzheimer’s disease and is currently a patient in a memory care facility. When she was moved to the facility, Andrews, who had been working at the CU, took over management.
Under the scheme, Andrews, her husband, Danny Andrews, their daughter, Tiffany Simpson, their son, Steven Andrews, and his wife, Patricia Andrews, arranged a sophisticated scheme by which they allegedly enriched themselves through loans credited to other members, then paid off the loans using other members’ deposits. By February 2006 there were more than 100 loans totaling $2.5 million credited to members who had no idea their accounts had been tapped into.
NCUA took over the credit union in July of 2006 and placed it into involuntary liquidation.
