DENVER – A state judge sentenced the president of a Virginia Islands credit union to a year in prison today for failing to produce documents related to the state’s investigation into the credit union’s sale of above-market rates brokered CDs.
Fred Joseph, Colorado’s commissioner of securities, said he opened the investigation into Her Majesty’s CU because it was unclear whether the instruments being sold were in fact CDs or unregistered securities subject to state and Securities and Exchange Commission rules, since they are not insured products. The nexus of the state’s jurisdiction is an office the credit union operates out of Denver and the residence of the president of the credit union, Stanley Roberson, in the Denver suburb of Aurora, according to Joseph.
“He did not produce the documents at the first hearing, or at the second hearing, so at the third hearing the judge gave him a year in prison,” Joseph told the Credit Union Journal, of Roberson.
Her Majesty’s CU, one of six credit unions in the Virgin Islands, purports to serve members of the U.S. Military, residents of the U.S. territory or anyone from the general public who wants to open an account. The other five credit unions in the Virgin Islands are all federally chartered and federally insured, but Her Majesty’s CU is not, which raised alarm bells, said Joseph.
At today’s contemp hearing, Roberson was sentenced to six months in jail for contemp and an additional six months for failure to produce documents pursuant to a subpoena. The additional six months can be reduced if Roberson produces the documents.
