Four former executives with a failed housing finance CUSO have been indicted on fraud and other charges for their alleged activities when working for the organization.

David Jungen, his wife Elaine, Jerome Poelhnelt and David Chapman were named in a federal indictment unsealed last week in the U.S. District Court for the Eastern District of Wisconsin last week.

The 2009 collapse and bankruptcy of Central States  Mortgage Company, a housing finance CUSO, led to credit union failures and mergers among the its credit union owners and contributed to the collapse the Members United Corporate Credit Union. 

The CUSO which was owned, according to the indictment, by Wisconsin- and Illinois- chartered credit unions, the Wisconsin Credit Union League Service Corp. and the Jungens themselves, along with other individuals.

The indictment alleges that the executives defrauded the organization and its other owners by allegedly forming a pool of mortgages in the name of CUSO which then served as an investment vehicle that allegedly sent interest payments to the executives.

The group also was alleged to have closed the fraudulent investment vehicle down in June 2008 and to have distributed its subprime holdings among other, legitimate, CUSO investment vehicles. The totals allegedly defrauded by the four run to more than $9.2 million.

In addition, Chapman was alleged to have obstructed justice in the investigation of the matter by allegedly lying to federal investigators.

No comment from the U.S. Attorney for the Eastern District of Wisconsin was available Monday due to the federal government shutdown.