NCUA headquarters, Washington, D.C.
A former credit union CEO who allegedly stole funds through a check kiting and phony loan scheme at a Pennsylvania credit union has been banned from participating in the affairs of federally insured financial institutions, according to an NCUA prohibition order.
While Anne Cruz was CEO of the $2.3 million P.N.G. Northern Federal Credit Union in Vandergrift (east of Pittsburgh) from 2018 to 2021, she allegedly used a check kiting scheme that included recording and disbursing fictitious loans, the NCUA said Wednesday.
She allegedly used the funds from the fake loans for her personal expenses and concealed the fraud by manipulating credit union records.
Cruz was fired on Dec. 31, 2021, according to the federal agency's prohibition order.
The NCUA did not specify how many phony loans were involved in the scheme, how much money was allegedly stolen or how it was discovered.
"Respondent (Cruz) activities caused significant financial loss at the credit union," the NCUA's prohibition order read. The order did not list the total amount of the financial loss.
The federal agency did not state whether the fraud had been reported to law enforcement authorities.
According to NCUA financial performance reports, P.N.G. Northern did not start to show any losses until December 2020, when the credit union posted a loss of more than $6,000. In every quarter of 2021, the credit union showed four-and-five-figure losses and ended the year with a loss of nearly $60,000.
However, in the first and second quarters of this year, P.N.G. Northern posted losses of $171,663 and $295,410, respectively, according to NCUA financial performance reports.
Except for in 2018 when the credit union posted a nearly 9% growth in loans, P.N.G. Northern recorded significant single- and double-digit declines in loans from 2019 through this year's first and second quarters.
The credit union also saw declines in membership and currently serves less than 500 members.
Cruz did not deny or admit to any wrongdoing, according to the NCUA's prohibition order.
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Peter Strozniak
Credit Union Times reporter covering credit union operations, fraud, M&As, leagues, business continuity, and breaking news.
