Multi-Million Dollar Business Loan Scheme Alleged

BROOKLYN, N.Y. – A federal jury was deliberating yesterday on the first case of a multi-million dollar member business-loan-scheme-gone-bad that sunk Central CU. The $75 million credit union merged last year with Progressive CU after it was forced to write-down almost $17 million in business loans brokered by a local figure in the Greek community. The broker, Theodore Georgacopoulos, is being sought by authorities and is believed to have returned to Greece; but one of the businessmen, Daniel Eleftheriades, is on trial here for conspiracy in connection with a $300,000 loan he got from Central CU. Losses on 33 MBLs are estimated at around $7 million, but could be more or less, a lawyer in the case told The Credit Union Journal yesterday. Prosecutors claim Georgacopoulos helped qualify the borrowers by filing false loan applications and documentation. Progressive CU filed suit in federal court here last month against CUNA Mutual, claiming the credit union insurer has shortchanged it on the bond coverage by at least $3 million. The suit also claims that Ira Rudin, who was fired in 2005 as Central CU’s CEO, embezzled as much as $200,000, which should also be reimbursed by CUNA Mutual. Rudin has not been charged with any wrongdoing.