GLEN ROCK, N.J. – NCUA charged in federal court that former executives and directors of Peoples First Choice FCU siphoned millions of dollars from the one-time $25 million credit union, forcing it into the arms of the federal regulator amid a $5 million loss, one of the biggest losses in the country last year.
In a civil RICO suit filed in federal court in New Jersey, NCUA claims the credit union’s President and CEO Henry Slootmaker and his wife Carolyn Slootmaker; Chief Financial Officer Jolene Constantine; Business Development Officer Dean Ramirez; Melicio Mendez, a director, and several members stole millions of dollars they had purportedly lent out to members for mini buses that eventually ended up in business accounts controlled by Slootmaker.
The suit claims that Slootmaker and the other defendants approved numerous loans without the knowledge of the account holders; using fictitious names; using collateral already pledged for other loans, then transferred the loan proceeds to accounts they controlled. In many instances, companies they controlled repossessed the mini buses, then resold them, pocketing the funds themselves. On several occasions, according to NCUA, the loan proceeds went directly to companies the former executives controlled.
In a civil RICO suit–alleging violation of the Racketeer Influenced and Corrupt Organization statutes–NCUA is asking for treble damages from the defendants.
Though the program lost over $3 million, Slootmaker and Constantine reported to the board the program was profitable and should be continued, NCUA charged in its suit.
Faced with millions of dollars in losses, NCUA took over the 55-year-old credit union in June 2007, then liquidated it in May 2008.
