POUGHKEEPSIE, N.Y. – A former loan officer at TEG FCU yesterday was charged with conspiring with a local auto dealer to provide indirect auto loans to unqualified subprime borrowers, many of whom were not eligible to join the credit union.
The dealer, Mega Auto Sales, allegedly paid the officer to process the loans – as much as $1.4 million worth – knowing that documents used to qualify the buyers were false.
The loan officer, Shane Gordon, who headed TEG’s indirect program, has since been fired from the credit union.
“He met them when he was trying to scout out business for the credit union,” said Ed Whitesell, assistant district attorney for Dutchess County, N.Y. Gordon was paid about $200 per loan he approved, he said.
Jorge Manzanarez, 30, and Nilson Cortez, the owners of the dealership, provided Gordon with false documents, including pay stubs, tax records and documents indicating a sufficient tie to Dutchess County to qualify for membership in TEG FCU, according to the indictment.
The first loan applications were submitted last June and more than 80 loans were approved until the scheme was discovered in September. “Most of the loans are in default or close to it,” Whitesell told The Credit Union Journal yesterday.
All of these loans violated TEG FCU’s lending standards. None of the loans would have been granted absent the fraudulent submission of documents.
The dealers were charged this week in a separate case involving bank fraud and other schemes, including the sale of phony warranties.
