Ten Years And Thousands Of Miles Later, Ex-CEO Of Samoan CU Sentenced
Bernard Gurr, the former manager of defunct American Samoa Government Employees FCU, was finally sentenced to prison, more than 10 years after the NCUA takeover of the tiny Pacific island's only credit union, ending the longest-running case in NCUA history.
"I think what this shows is no matter how far we have to go and how long it takes, NCUA is committed to bringing wrongdoers to justice," said Steven Widerman, an NCUA attorney, who traveled to American Samoa to take the troubled credit union under conservatorship on October of 1993 and has been working on the case ever since.
But Gurr, who has been languishing in a suburban Virginia jail since his April 2001 conviction on 19 charges of bank fraud, conspiracy and obstruction of justice, refused to go quietly. Appearing in gray-and-white striped prison garb, the 50-year-old Gurr made an impassioned plea to the judge, insisting that the U.S. government has no jurisdiction over the Pacific territory, more than 10,000 miles away from Washington, where his trial took place.
The trial was held in Washington, despite its distance from American Samoa, because the island does not have a federal court and the District of Columbia has jurisdiction over American territories like American Samoa. Translators were required to hear testimony from some witnesses, who were transported all the way to the capital for the trial.
Rejecting the public defenders' pleas for leniency, federal Judge Thomas Hogan sentenced Gurr to 70 months in prison, with credit given for the 30 months already served behind bars, and ordered him to pay $29,000 in restitution, the only direct cash benefit federal prosecutors were able to definitively tie to him, despite estimated losses of $4.5 million that bankrupted the credit union.
Gurr's Washington attorney, Joseph Conte, suggested that while Gurr may have been found guilty of cooking the books of the credit union, the financial fate of the institution was sealed by two disastrous hurricanes that hit American Samoa prior to the NCUA takeover and to cutbacks in government wages, the main source of income for American Samoans, and credit union members. "I think if you look back at his intentions you'll see that his intentions were not nefarious; his intentions were to keep the credit union open," Conte said.
Judge Hogan said he was convinced by the defense's argument that Gurr was not solely responsible for the failure of the credit union, but was constrained by federal sentencing guidelines for white collar criminals.
Gurr was convicted of a scheme to hide the loans made to himself, friends and relatives and the true financial condition of the credit union from NCUA. He changed due dates and interest rates on loans without the borrowers' knowledge to hide delinquency rates form NCUA examiners, and instructed employees not to talk to examiners. He was arrested getting off a plane in Honolulu in December 1999 with credit union records hidden in his luggage.
Three co-conspirators of Gurr received lesser sentences after agreeing to cooperate with the government.