NCUA Bans Former Melrose CU CEO Alan Kaufman
Another former CEO, a branch supervisor, a teller and other employees are also hit with prohibition orders.
Six former employees, including Alan Kaufman, the former president/CEO of Melrose Credit Union who pleaded not guilty to four felony counts of bribery and one felony count to defraud the United States, were banned, the NCUA said Friday.
“After determining that continued service or participation by Kaufman in a credit union’s operations may impair public confidence in federally-insured credit unions, the NCUA Board issued a notice prohibiting Kaufman from further participation in the affairs of any credit union,” the NCUA said in a prepared statement.
Typically, the independent federal agency issues prohibition orders against former credit union employees from ever participating in the affairs of any federally-insured financial institution after they have been convicted or sentenced.
Federal prosecutors for the Southern District of New York in Manhattan alleged that between 2010 and about 2015, Kaufman accepted bribes from Tony Georgiton, owner of a taxi medallion brokerage company, in exchange for millions of dollars in loans from the credit union. Georgiton was charged with one count of conspiracy to commit bribery and one count of bribing an officer of a financial institution.
Kaufman’s trial has been scheduled for April 2020 in U.S. District Court in Manhattan.
Melrose, which made millions of dollars in loans to taxi drivers in New York City, was taken over by the NCUA last September. Many drivers could not repay the loans because the value of their taxi medallions plunged due to competition from ride-sharing companies and other issues.
About a month before the credit union was taken over, the NCUA filed administrative charges against Kaufman, alleging the bribery scheme. Kaufman claimed he was being scapegoated.
Ginny A. Hughes, a former president/CEO of the $23.3 million Changing Seasons Federal Credit Union in Hampden, Maine, was banned because she allegedly accepted various charitable donations at a 2018 event and used the money for her personal use, according to the NCUA’s administrative order. In that same year, she also improperly signed the name of her then-husband to multiple unsecured loans taken out at CSFCU that have subsequently defaulted. In 2017, Hughes improperly applied for and obtained an unsecured loan from the credit union, which also subsequently defaulted. What’s more, in 2016 she allegedly improperly influenced her application with the credit union for a home equity line of credit in the amount that far exceeded what she was qualified for. The NCUA did not list the total amount of the loans or the amount of charitable funds she used for her own use.
The NCUA also banned Kimberly Michelle Roberts, a former branch supervisor for the $24.8 million My Healthcare Federal Credit Union in Gainesville, Fla. She pleaded guilty to 12 counts of embezzlement and was sentenced in September 2018 to “one day with credit for time served as to each count,” according to federal court records. Roberts stole more than $130,000 in cash from the vault from June 2015 to September 2016. She attempted to conceal her theft by telling her supervisors that she sent the “mutilated” cash to the U.S. Bureau of Engraving and Printing to be replenished, according to court documents. Roberts was ordered to pay restitution of $130,468 and serve five years of supervised release.
Karen S. Buxton, a former teller for the $16.2 ADM Credit Union in Decatur, Ill., was sentenced to six months in prison in September 2017 after pleading guilty to stealing more than $66,000. She was ordered to pay $66,584 in restitution and serve 24 months on probation following her prison sentence. Police said Buxton stole funds from two members, created phony email accounts to enroll them in online banking and then forged their signatures on banking transactions.
Christy R. Harrison, a former employee of the $58.6 million Altamaha Federal Credit Union in Jesup, Ga., was sentenced on two counts of forgery by a state judge in May 2018. The NCUA’s administrative order does not identify her job title or whether Harrison served prison time.
Doretha Denise Steward, a former employee of $8.2 million Fayetteville Postal Credit Union in Fayetteville, N.C., pleaded guilty to two counts of embezzlement. The NCUA’s administrative order does not identify her job title, how much she stole from the credit union or whether a state court judge sentenced Steward to prison time.