Prosecutors Charge Cronyism Killed Samoan CU

- WASHINGTON(03/23/01) - Federal prosecutors claimed the Bernard Gurr,former manager of American Samoa Government Employees FCU milkedthe defunct credit union on behalf of family and cronies, pushingthe $6 million into insolvency in 1993. "Th defendant's friends andcronies became rich while the ordinary credit union members sat inthe lobby waiting for hours and lost their savings," said assistantU.S. Attorney Anna Matheson, during opening arguments in Gurr'sfraud trial. But Gurr's Washington attorney Joseph Conte insistedit was the troubled economy of the south Pacific island , batteredby massive government layoffs, and two major tropical storms,Typhoon Ofa and Hurricane Val, that killed the institution. "Itwasn't Bernard Gurr that caused the closing of this credit union in1994. There were other things involved," said Conte. NCUA attorneySteven Widerman testified that when he arrived to take the creditunion under conservatorship in October 1993 Gurr and the boardresisted the government takeover, then Gurr walked by NCUA agentsto confiscate credit union records. Those records surfaced sixyears later when Gurr was arrested at Honolulu Airport with thestolen credit union records hidden in his luggage. The credit unionfailure cost the NCUSIF $4.5 million in losses.