Failed CUs Flunk ‘Millionaire U’

FT. MYERS, Fla. – The scandal surrounding a failed land speculation deal here continued to grow yesterday with the revelation that a third failed credit union, New Horizons Community CU, was also involved, making NCUA, which has taken over all three credit unions, liable for millions of dollars in losses. New Horizons was a $320 million Denver credit union taken over by NCUA earlier last year, then sold in a purchase and assumption agreement to Security Service FCU, the San Antonio credit union with a large presence in Colorado. In a so-called P&A deal, NCUA provides financial assistance to a credit union to acquire a failed institution and the regulator assumes the failed institution’s bad liabilities. The federal regulator is said to be shopping two other credit unions it has taken over in recent months, Norlarco CU, in Colorado, and Huron River Area FCU, in Michigan, both of which made hundreds of millions in loans to investors in the failed Florida development. The three are alleged in civil suits to have participated in a massive land swindle in which speculators from around the country were enrolled in a real estate investment program, called Millionaire University. Enrollees at Millionaire U were purportedly taught how to profit from the Florida land boom by buying pre-leased homes in Ft. Myers-area developments Cape Coral and Lehigh Acres, then flipping them within a year at a higher price. The speculators, from as far as Boston, New Jersey, Philadelphia, Maryland, Ohio and Missouri, claim they were duped by the promoters and the lenders, which also included several banks. The once-hot property development, located inland from the Gulf of Mexico, has since gone bust, with thousands of property owners walking away from their loans, leaving a veritable ghost town behind. A lawyer for the plaintiffs in one of the New Horizons suits said she is transferring the case from the state court in Ft. Myers to the federal court because of jurisdiction. A lawyer representing NCUA refused to comment.