Prosecutors Say CDCU Figure Siphoned Member Funds to Cover Fraud
SPRINGFIELD, Mass. – Federal prosecutors told a jury yesterday that Carol Aranjo, the former president of D. Edward Wells FCU, transferred almost $180,000 from member accounts to cover negative balances in her and family members’ accounts as NCUA examiners were questioning the now-defunct community development credit union’s bookkeeping.
The scheme helped hide the theft of more than $2 million through phony loans to Aranjo, her husband and son and friends, the prosecutors told the jury yesterday in the second day of the trail of Aranjo, once the nation’s leading spokesperson for CDCUs.
Authorities allege the scheme enriched Aranjo and her family and bankrupted the once-prominent CDCU, forcing NCUA to take it over and liquidate it in 2003, at a cost of more than $2 million to the National CU Share Insurance Fund.
Aranjo, who served as chairman of the National Federation of CDCUs, emerged as a national spokesperson for community development financial institutions during the Clinton administration, which held the CDFI program out as a beacon for serving the nation’s poor communities and inner cities.
