A Wisconsin credit union has disclosed it is among the victims of an alleged nationwide fraud scheme that may involve more than $175 million in bogus U.S. Department of Agriculture-backed loans that were sold to financial institutions, retirement funds, municipal groups and other investors across the country, according to the credit union, court documents and national media.
As a result of an alleged scam that hit Milwaukee-based Pennant Management, the leading purchaser of USDA-guaranteed Rural Development Business & Industry loans,UW Credit Union has taken an investment loss contingency charge of $13.1 million against year-to-date earnings, according to a statement issued by the credit union.
The move is precautionary, Paul Kundert, president/CEO of the $1.9 billion, Milwaukee-based UW Credit Union, said in a prepared statement.
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