ALEXANDRIA, Va. NCUA reported it is investigating what it suspects was an elaborate fraud that led to December’s failure of G.I.C. FCU, a $16 million Euclid, Ohio, credit union and is projected to cost the National CU Share Insurance Fund more than $6 million in losses.
Preliminary investigations conducted by NCUA and criminal authorities found that the credit union was insolvent due to an embezzlement perpetrated by the manager, which involved an elaborate scheme to falsify CDs, investment statements, and bank statements to conceal an $8.1 million shortage in the credit union’s asset accounts.
NCUA liquidated the 76-year-old credit union, chartered to serve employees of Gould Inc., on December 13 and assigned its remnants, which included 3,400 member accounts, to Steel Valley FCU, of Cleveland, in a purchase and assumption agreement. Steel Valley FCU is a $37 million credit union serving more than 7,800 members.
Cleveland was home to the biggest credit union fraud ever, causing the 2010 failure of St. Pal Croatian FCU, which cost the NCUSIF an estimated $185 million of losses.
