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.
The NCUA conserved the $238.8 million credit union on April 23 and liquidated it on April 30.
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