SPRINGFIELD, Mass. – Federal prosecutors opened their case yesterday against Carol Aranjo, the one-time national spokesperson for community development credit unions, by saying they will show that Aranjo and her family stole millions of dollars from the prominent CDCU, D. Edward Wells FCU, eventually bankrupting the $7 million credit union.
The first day of the trial focused on a not-for profit affiliate of the credit union, Friends of the CU, which had a $2 million unsecured line of credit with D. Edward Wells. Prosecutors allege Aranjo, 66, lent millions of dollars to the group, as well as friends and family members and much of it was never repaid. They says Aranjo then manipulated the books to hide the scheme.
The government’s first witness was Curtis Monroe, one-time president of the credit union who later headed Friends of the CU. Monroe testified he didn’t know where the money was going and that Aranjo controlled the books of the non-profit.
Prosecutors say some of the loans went to Aranjo’s husband Douglas Smith, and their son, Douglas L. Smith. The case took a tragic turn last November when the son drowned in a boating accident on the overflowing Chicopee River.
Aranjo came to national prominence during the Clinton days when as chairman of the National Federation of CDCUs she became a spokesperson on Capitol Hill for community development financial institutions.
Aranjo has maintained her innocence all through the case.
NCUA took over and shut down D. Edward Wells in 2003, after 44 years in operation.
The trial is expected to last up to six weeks in U.S. District Court.
