FBI Probes $10 Million Embezzlement At Parsons Pittsburg CU

WICHITA, Kans. — Could $10 million in missing deposits have caused the liquidation of Parsons Pittsburg CU here?

An FBI investigation into the failed credit union has revealed the deposits could have been taken by a fired employee believed to have gambled with the credit union's money, the Associated Press reported. (The news service is not identifying the ex-worker because no criminal charges have been filed.)

The Kansas Department of Credit Unions liquidated Parsons Pittsburg CU in late March, two months after placing the $13.4 million-asset credit union in conservatorship.

As the liquidating agent, NCUA worked with $418.5 million Golden Plains CU, Garden City, Kan., which has assumed Parsons Pittsburg's members, assets, shares and loans.

NCUA took over the daily operations of Parsons Pittsburg in January, working with the Kansas Department of CUs, in an attempt to resolve the troubles at the institution.

At the time, the administrator of the department said the credit union was placed into conservatorship because of the recent discovery of "unsafe and unsound practices," according to a statement released by NCUA.

An FBI affidavit states that the majority of the missing deposits were diverted from credit union accounts to accounts controlled by the suspect. According to the affidavit, records showed the suspect spent more than $190,000 at casinos in Oklahoma and Missouri between mid-January and early March.

Chartered in 1951, Parsons Pittsburg had 1,466 members and still had a net worth ratio of 9.49% and net income of $24,864, according to its December 2013 call report. But on its risk-based network worksheet, it came in at 5.93%.

In 2012 the credit union had $53,000 in net income, with a net worth ratio of 9.35%. In 2011 it made $21,866 in net income from operations while paying $32,044 to the corporate fund left it with a loss of $10,178.