NEW LONDON, Conn. – Authorities believe an 82-year-old investment advisor for New London Security FCU may have leaped to his death last July just hours after regulators shuttered the 72-year-old credit union because investigators were closing in on a multi-million dollar embezzlement.
Edwin Rachleff, a broker for A.G. Edwards who handled the $12.7 million credit union’s investments for many years, jumped from a window on the top floor of an 11-story apartment building for seniors in New London on July 28, just hours after NCUA announced it was seizing the institution. The NCUA seizure seemed unusual because the credit union appeared to be healthy, with only $5,000 of reported losses for the first half of the year and 17% capital. But one thing stood out, the credit union had just $234,000 in loans to members, meaning more than 98% of its assets were in investments.
Officials with the New London Police Department would only say the investigating has not been concluded. And a spokesman for the Connecticut Attorney General’s office would only confirm they are continuing to probe the matter.
But almost $5 million in investments Rachleff was supposed to have made on behalf of the credit union appears to be fictitious, sources involved in the investigation told The Credit Union Journal. They concluded that Rachleff stole the funds. The sources did not want to be identified because the investigation is ongoing.
The source said the authorities are still trying to determine if anyone else was involved in the theft and what happened to the funds.
Because the credit union had uninsured funds, some of the 365 members of New London Security did not receive 100% payouts. NCUA said it paid out 97% of member funds.
