Embezzling

A trio of former credit union employees received lifetime bans from the financial services industry, including one who was accused of stealing almost $15,000.

Last month's enforcement actions included the former CEO of Western Heritage Federal Credit Union in Alliance, Neb.

The regulator barred nearly a dozen former credit union employees from working with any financial instiutiotn following charges of theft, embezzlement and more.

The regulator issued seven prohibitions for offenses including attempted theft and conspiracy to commit bank fraud.

The lawsuit claims that the board didn't properly supervisor management, which allowed former CEO Edward Rostohar to embezzle more than $40 million.

Those that were prohibited from working at federally insured institutions include a former credit union employee who pleaded guilty to money laundering and embezzlement.

Regulators placed the $3 billion-asset institution into conservatorship less than a year after the New York City-based CU fired President and CEO Kam Wong in the wake of embezzlement charges.

Edward Rostohar, who was CEO of CBS Employees Federal Credit Union, could face up to 15 years in prison following a $40 million scheme that brought down the institution.

Edward Rostohar was arrested after his wife informed authorities he stole from CBS Employees Federal Credit Union and was preparing to flee the country.

The pair subject to the regulator's March prohibition orders both pleaded guilty and were ordered to pay more than $320,000 in restitution, among other punishments.

Despite strong performance in the industry overall, analysts expect regulators to shutter more institutions in the years ahead.

Kam Wong has been accused of submitting requests for fake expense reimbursements when he ran Municipal Credit Union.

In September, the National Credit Union Administration barred five people from the industry, including one individual who was accused of working to embezzle more than $1 million.

A former employee in the VyStar Credit Union mail room has been charged in a case involving mail fraud and millions of dollars in stolen stamps.

Credit unions urged to review expense and reimbursement policies, and board oversight of top executives.

Recent NCUA prohibition orders have included restitution payments ranging from $14 million to $18 million, but it remains to be seen whether such stiff penalties will curb the incidence of fraud at CUs.

This is the second consecutive month that restitution payments for accompanying prohibition orders have exceeded $10 million.

That was just one of the five prohibition orders issued by the National Credit Union Administration in April.