LAKEWOOD, Ohio As authorities attempt to track down Alex Spirikaitis, former CEO of the failed Taupa Lithuanian CU wanted for embezzlement, two credit unions are reaching out to TLCU members stunned by this week’s developments.
According to the warrant for his arrest, Spirikaitis is accused of making “false credit institution entries” in the failure of the $24-million Cleveland credit union, which was seized by state regulators and NCUA on Monday. He was thought to be involved in a standoff with police at his home mid-week, but authorities stated it is unclear if Spirikaitis was ever inside his home on Liberty Road. He was still at large Thursday evening.
Latvian Cleveland CU and Eaton Family CU are doing what they can to keep Taupa Lithuanian members within the CU movement. Earlier this week, LCCU received approval from this state’s credit union regulator to expand its field of membership to include individuals of Lithuanian descent. CEO Guna Foraker said she made the request for the expanded charter as soon as she heard NCUA took over TLCU. The state responded with an approval within two days.
“It was shocking to everyone in this community, not only the credit union’s conservatorship but what has happened with Mr. Spirikaitis,” said Foraker. “We called the division of credit unions because we thought the charter addition was logical. Lithuania is one of the Baltic states. We already serve an Estonian membership, and the cultures and languages of the two memberships are very similar. We wanted to reach out to our sister countrymen and offer them our credit union’s services, and did not want them to lose out on all the benefits a credit union can offer.”
Foraker said when NCUA mails out deposit checks to TLCU members a letter will be included stating the members are eligible to join LCCU. The CEO told Credit Union Journal that her CU has yet to receive any calls from the TLCU membership, but did get some inquiries from existing members asking if Latvian Cleveland was OK. “We reminded them that what happened at Taupa Lithuanian has nothing to do with our credit union, and that we are thriving and strong, with capital above 13%.”
The TLCU takeover, the fraud allegations against Spirikaitis and his alleged flight from authorities have rocked communities in which the church is big part of both memberships, said Foraker. TLCU is located on Cleveland’s east side, about 10 miles from LCCU, which is on the city’s west side in a 100-year-old Latvian church. “We both are very proud cultures. So to hear of one bad apple brings sadness, shock and disbelief to all,” said Foraker.
Foraker said she knew very little about Spirikaitis, and that based on her attempts over the last five years to contact him, Spirikaitis kept to himself. “I had reached out to him three or four times to join me and other credit union CEOs at breakfast meetings, but he never returned my calls. So I gave up. I did meet him once at a meeting with a data processor, and he seemed to be a very different individual.”
The collapse of TLCU is not the first time the Cleveland credit union community has been jolted by scandal. In 2010, the sudden failure of St. Paul Croatian FCU drew the attention of the entire CU industry. Former CEO Anthony Raguz eventually was sentenced to 14 years in prison and ordered to pay $72 million restitution for masterminding the biggest fraud in credit union history, costing the National CU Share Insurance Fund $185 million (Credit Union Journal, June 27
Cleveland CUs In Bulls-Eye
Eaton Family CU CEO Mike Losneck is concerned the two instances of fraud will have examiners placing a big bulls-eye on Cleveland-area credit unions.
“Ever since St. Paul, things have gotten tough for all Cleveland credit unions, in my opinion. Examiners question all kinds of things they never questioned before. It often seems like we are working more for the examiners than for the members. This business at Taupa Lithuanian won’t help,” Losneck declared.
Eaton’s main office is 30 blocks away from TLCU, and as of Thursday the $60-million EFCU had signed up seven members from the failed credit union. “We are getting ready for the checks from NCUA,” said Losneck.
The TLCU fraud apparently came as a big shock to the failed credit union’s board, according to Losneck’s experience with the former CU’s directors. “From the last conversation we had with some of the board members, they were really excited about growing the credit union, adding services and doing good things for the membership,” he said.
