American Samoan CU CEO Sentenced to 70 Months

WASHINGTON-Former American Samoan Government Employees Federal Credit Union Manager Bernard Gurr, 50, was sentenced last Friday to 70 months in prison plus three years of supervised release after being convicted of conspiracy, fraud and obstruction. Gurr was also ordered to pay restitution of $29,000 by Chief Judge Thomas F. Hogan of the U.S. District Court for the District of Columbia. The judge found that his actions while manager of the $4.5 million credit union led to the institution’s failure. Gurr was convicted on April 9, 2001 following a three-and-a -half week jury trial on 18 counts including conspiracy, violating NCUA books and records requirements, lying to NCUA examiners about the financial condition of the credit union, obstructing the examination of a financial institution, and tampering with a witness. NCUA Chairman Dennis Dollar released a statement saying that justice had been served. He added, “In deceiving the members of the American Samoan Government Employees Federal Credit Union, Bernard Gurr’s egregious conduct and gross disregard for federal law and regulation resulted in the demise of their credit union and substantial loss to the share insurance fund. This was not only an extreme case of credit union mismanagement, but it also demonstrated willful criminal conduct resulting in the loss of a federally-insured credit union that was owned by and was a crucial part of the financial lives of its members.” Dollar also pointed out that “only limited financial services are available in American Samoa,” which makes the closing of the institution more tragic. “As always, NCUA is eager to consider new charter opportunities to restore access to lower cost financial services for the residents of American Samoa. However, this sentence today should reinforce beyond any question that the National Credit Union Administration is committed to maintaining consistent regulatory oversight over all institutions under our jurisdiction and should send an unmistakable message that criminal wrongdoing against a federally-insured credit union will not be tolerated and the person or persons responsible for any wrongdoing will be held accountable.” Specifically, Gurr conspired with other credit union employees between 1990 and 1993 to hide the failing financial condition of the institution from examiners. The government also demonstrated that Gurr orchestrated a cover-up by creating false delinquency reports, changed due dates and interest rates for loans without the borrowers knowledge, and creating a system bypassing the credit committee so he could personally approve loans. Evidence also showed that Gurr embezzled funds by creating a false loan account. Additionally, Gurr ordered employees to send NCUA examiners with questions directly to him and to keep certain accounts out of the hands of examiners. NCUA had determined that a conservatorship was necessary in October 1993, but, in retaliation, Gurr took credit union documents and property. Though NCUA sought an injunction to force him to return the documents, many were missing until Gurr was arrested in Honolulu on a warrant from the Federal Bureau of Investigation. Two boxes of credit union documents were among his luggage. Three of his co-conspirators testified against him in exchange for a lighter sentence. Aukuso Afano Ah Ching and Eneliko Kelemete, former loan officers of the credit union, were also sentenced to one year on probation. Mene Loia, another former loan officer, was sentenced to one day in jail and five years of supervised released. -