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NCUA Cites Fraud and Lax Examination as Causes of St. Paul Croatian FCU Failure

Fraudulent activity covered up by top leadership and a failure by NCUA examiners to adequately follow up on red flags caused the failure of St. Paul Croatian FCU, according to a report by the NCUA's Office of Inspector General.

By Claude R. Marx | Updated on October 13, 2010

Fraudulent activity covered up by top leadership and a failure by NCUA examiners to adequately follow up on red flags caused the failure of St. Paul Croatian FCU, according to a report by the NCUA’s Office of Inspector General.

The Cleveland-based credit union’s top management didn’t implement proper controls and oversight and its former CEO “manipulated loan records and masked the suspected loan fraud by constantly refinancing certain loans or making advanced payment on those loans,” the report said.

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NCUA Cites Fraud and Lax Examination as Causes of St. Paul Croatian FCU Failure

Fraudulent activity covered up by top leadership and a failure by NCUA examiners to adequately follow up on red flags caused the failure of St. Paul Croatian FCU, according to a report by the NCUA's Office of Inspector General.

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