New Drama By Actors FCU Over $4 Million CUMIS Bond Claim

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NEW YORK – With the caveat that all roads lead to CUNA Mutual – at least when credit union malfeasance is involved – Actors FCU last week filed suit against the insurer’s CUMIS Insurance Society unit seeking payment for $4 million the New York City credit union lost in a $50 million fraud by its cash carrier.

The credit union for Broadway actors and stage workers says CUMIS denied its bond claim for fraud, in which the owner of Mount Vernon Money Center was jailed last year for siphoning as much as $50 million from credit union and bank customers.

“The claim was denied because it does not meet the requirements for coverage under CUNA Mutual’s Bond,” said Phil Tschudy, chief spokesman for CUNA Mutual. “We hope this matter can be resolved in a fair manner for all parties.”

The biggest victim of the fraud was Webster Bank of Connecticut, which lost as much as $12 million. In addition, Actors FCU lost $4.3 million; Northeast Alliance FCU, $565,000; ADP FCU, $438,000; Atlanta’s Delta Community CU, $520,000; and Cardtronics, the nation’s largest ATM operator, $2.1 million.

Mount Vernon’s owner, Robert Egan, and his chief operating officer, Bernard McGarry, commingled millions of dollars of cash collected from the company’s customers and used it to supply ATMs and to pay business expenses, according to federal prosecutors.

Mount Vernon Money Center provided a variety of cash management services, including replenishing cash in more than 5,300 ATMs owned by credit unions and banks. It also provided armored car services to banks, financial institutions and retailers through a subsidiary called Armored Money Services.

 

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