Virginia Woman Jailed for $2.5 million CUNA Mutual Scam

ROANOKE, Va. – A former member representative for CUNA Mutual Life Insurance Co. was sentenced to more than eight years in prison and ordered to repay $1.5 million to CUNA Mutual Life and Merrill Lynch for an investment scam that drained as much as $2.5 million from CUNA Mutual customers. No customers lost any money to the scam because the losses were covered by CUNA Mutual or insured. Earlier this year, Monica Yates, 40, pleaded guilty to animal cruelty charges for mistreating more than two dozen sick or dead dogs and cats in her home. After leaving CUNA Mutual Life in May 2006, Yates convinced as many as 18 policyholders to terminate their long-term CUNA Mutual financial products and invest them in fictitious variable annuities. She prepared phony account statements to show the victims the funds were being invested and earning monthly interest. She failed to tell her victims that termination of the CUNA Mutual products carried heavy early cancellation fees. She also victimized at least four customers at Merrill Lynch, where she worked briefly after leaving CUNA Mutual. The funds were deposited into Yates’ own account at Bank of America. Actual losses to the victims, not counting early cancellation fees and lost interest, were $1.3 million.