ALEXANDRIA, Va. — The individual at the center of a fake Internet-based credit union and that cost investors millions pleaded guilty Wednesday in federal court here.
Indianapolis-based Timothy J. Coughlin, 63, pleaded guilty to defrauding thousands of investors through the fake online organization that did business as "Oxford International Credit Union" or "Oxford International Cooperative Union."
According a complaint filed by the Securities and Exchange Commission, Oxford International Credit Union and Coughlin collected deposits from more than 5,000 investors exceeding $12.8 million. Some investors were based outside the U.S. — 3,300 resided stateside.
The SEC alleges that Coughlin misappropriated investor money, at least $5.9 million, to pay personal expenses, fund unrelated business expenses and make distributions to other investors in a Ponzi-scheme fashion.
The plan, according to the SEC, included posting false information to investors' online accounts to create the appearance that their deposits in the fake credit union were earning about a 356% average annual rate of return from January 2007 through December 2009, according to a published report.
The complaint states that the defendants failed to make investments with member's deposits sufficient to generate the results that were posted.
The SEC also stated that in December 2008, Coughlin launched a successor to Oxford International CU — Oxford International Cooperative Union — which also showed fake investment returns on its website through December 2011.
The SEC's complaint alleges that Coughlin, in late 2008 and in 2009, began to deny investors' requests for withdrawals from their accounts, falsely claiming that the Internal Revenue Service and foreign tax authorities had frozen Oxford International and Oxford International Cooperative Union's accounts.
