Iowa Corp Prepares To Liquidate
DES MOINES, Iowa-Directors of Iowa Corporate CU are scheduled to meet over the next two weeks to prepare a voluntary plan of liquidation for the $100-million corporate.
Most of Iowa Corporate's members, 102 credit unions, have contracted with the National Cooperative Bank for a variety of correspondent services formerly performed by the corporate, including deposit products, credit facilities, payment processing and settlement services, according to Sara Flynn, president of Iowa Corporate. A small group has opted to join other corporates for the services.
As part of the voluntary liquidation members of Iowa Corporate are expected to receive a liquidating dividend but the amount is undetermined, Flynn told Credit Union Journal last week.
The 36-year-old Iowa Corporate will be the second corporate credit union to voluntarily liquidate, following the June dissolution of North Dakota Corporate CU. There also are at least five corporate mergers in the works.
Mortgage Broker Is Sentenced
PHILADELPHIA-A local mortgage broker has been charged in a federal indictment with masterminding a $4-million mortgage fraud scheme he allegedly ran through Police & Fire FCU.
The indictment alleges that John McElroy, 53, entered into at least 13 fraudulent real estate deals in Florida, New Jersey and Pennsylvania by falsifying documents to obtain mortgages and equity payouts on properties.
The real estate deals were financed through a variety of lenders, including Countrywide, IndyMac, Northwest Savings Bank, American Freedom Assurance, Amtrust Bank and Philadelphia's Police & Fire FCU, where McElroy had an account he used to process the mortgage loan proceeds and pay accomplices, the indictment claims.
McElroy allegedly established fake companies and submitted false claims to obtain funds, but the companies conducted no business and provided no services. Authorities said the transactions, which occurred between December 2006 and September 2008, resulted in losses of more than $4 million to mortgage companies, banks and credit unions.
