National Figure Charged With Fraud InCDCU Failure
SPRINGFIELD, Mass. - (02/15/06) -- Carol Aranjo, who served as nationalspokesman for community development credit unions for severalyears, was charged in a civil suit filed by NCUA Tuesday with fraudand negligence in the 2003 failure of the CDCU she ran, D. EdwardWells FCU. Aranjo, who served a chairman of the National Federationof CDCUs and testified before Congress several times, was chargedwith looting the defunct credit union for her personal benefit andthat of family and friends and a community development organizationaffiliated with the credit union, known as Friends of the CU, orFOCUS. The suit also claims that Aranjo cooked the books of thefailed CDCU for several years to hide the scheme from NCUA. Alsonamed in the suit are Michael Akers, former chairman of the creditunion's supervisory committee; Mary Spruell, an officer with FOCUS;Aranjo's husband Alphonso Smith; and Aranjo's three sons, DouglasSmith and Paris Nadir and Alphonso L. Smith. The suit claims Aranjoallowed the credit union to improperly use a $2 million communitydevelopment loan from a Massachusetts insurance company; made anillegal loan to FOCUS; and regularly allowed herself and family andfriends to run negative share balances, among other things. D.Edward Wells FCU, was taken over by NCUA in 2003, one of more thana half-dozen prominent CDCUs to fail in the past few years. Theremnants of the insolvent CDCU were merged into WesternMassachusetts Telephone Workers FCU. The failure cost the NCUSIF$2.9 million. Aranjo did not return phone calls seeking comment.Akers, Spruell and Alphonso Smith all have unlisted phonenumbers.