A federal court agreed Thursday to let the National Credit Union Administration submit records under seal, bolstering its case for the April 15 conservatorship of Vensure Federal Credit Union.
U.S. Judge Rosemary Collyer conceded that the NCUA's argument backing the takeover includes its confidential grounds for conservatorship and records of credit union accounts held by Trinity Global Commerce, which processed bets for the two biggest online poker websites, PokerStars.com and FullTiltPoker.com.
The NCUA's takeover of the credit union came hours after the Justice Department seized $2 million in the Trinity Global account along with dozens of other accounts at other institutions as part of a crackdown on Internet gambling.
Lawyers for the credit union maintain it was not engaged in any illegal activity and that the NCUA knew all along what it was doing. Vensure's lawyers told the judge during a hearing last week on its request for a preliminary injunction to block the conservatorship that they are concerned the NCUA will liquidate the Mesa, Ariz., credit union before the court rules in the case.
Vensure insisted in court filings that it will continue to be a viable business even if the Justice Department seeks forfeiture of the Trinity funds. The credit union, which posted earnings of almost $600,000 last year, reported a $314,000 gain in its first quarter.
Collyer has set a show-cause hearing for May 11, where the NCUA will be required to show the validity of its takeover. The NCUA has never lost a court challenge to one of its conservatorships.