NCUA Seeks $4 Million in Restitution From Former Texas Credit Union CEO

The NCUA said Monday it is seeking restitution of at least $4 million from former Edinburg Teachers Credit Union President/CEO Jeffrey B. Moats, alleging he placed his personal financial interests ahead of those of the Edinburg, Texas-based credit union and its members when he allegedly violated the law, breached his fiduciary duties, and engaged in unsafe and unsound practices.

CU Times attempted to contact Moats via text on his listed cell phone number. He did not respond to that request for comment by Monday’s deadline. A voicemail message could not be left on his main phone number listed on a public directory.

During a joint examination by the Texas Credit Union Department and the NCUA in January 2021, examiners noticed a large debit balance in a general ledger account and determined that there had been several large transfers from this account to Moats’ personal accounts, the federal agency alleged in an administrative filing with the United States Office of Financial Institution Adjudication (OFIA). The OFIA is an interagency group of administrative law judges based in Arlington, Va.

When state and federal examiners requested Moats to provide documentation supporting these large transfers, he provided records that were allegedly fabricated, according to the NCUA.

After determining it was necessary to protect the interests of the credit union’s members, the Texas state regulator placed ETCU into conservatorship and appointed the NCUA as conservator on March 26, 2021.

A few days after the NCUA announced the conservatorship, CU Times revealed the credit union’s 2019 IRS 990 return showed that Moats was paid a total compensation of $1,611,821, which was four times the median base salary and bonus pay for CEOs across all asset sizes in 2019. In that year, Moats received a base pay of $467,600; bonus and incentive pay of $102,960 and other reportable compensation of $1,004,589. He also received $25,000 in retirement and other deferred compensation and $11,672 in nontaxable benefits.

What’s more, a CU Times review of Edinburg Teachers’ 990 returns from 2008 to 2019 showed that Moats received $8,799,709 in total compensation. Over those 11 years that averaged out to nearly $800,000 annually.

During the conservatorship, auditors determined that Moats allegedly directed ETCU staff to transfer $3,983,959 of credit union funds to his personal accounts. He also fabricated records to legitimize the transfers in connection with purported retention bonus or supplemental employee compensation plans that were never discussed nor approved by the board of directors, according to sworn statements of former board members, the federal agency alleged in its OFIA filing.

According to the NCUA, Moats also was a board member, which allegedly enabled him to fabricate some of the board’s meeting minutes and obtain the signature of ETCU’s board chair on some documents that were submitted to state regulators.

Moats, also without board approval, allegedly directed ETCU employees to fund his retirement account from credit union funds even though the plain language of the retirement account program stipulated that there would be no employer contribution, according to the NCUA.

The former CEO also allegedly directed ETCU staff to pay him $220,000 for unused vacation time even though there was no credit union policy that permitted the payment and without board approval.

When state and federal regulators requested documentation supporting the retention bonus and vacation time payments, Moats fabricated and backdated multiple documents in an attempt to legitimize the payments, the NCUA alleged.

Finally, Moats, without board authorization, caused ETCU to pay car insurance premiums of nearly $6,000 on his personally owned vehicle, a Cadillac, for five years.

The NCUA alleged that after the Cadillac was involved in a total-loss collision in 2019, ETCU acquired a new vehicle for him, a 2019 Camaro. Moats added the 2019 Camaro to ETCU’s insurance policy, but he did not remove the Cadillac from the policy.

The federal agency is seeking restitution of at least $4 million to ETCU and a civil money penalty of $1 million.

The $96.3 million ETCU, which serves more than 7,000 members, was released from conservatorship in January.

At the end of 2021, ETCU posted a net income loss of $2,570,138 while in December 2022, the credit union recorded a net income gain of $415,963, according to NCUA financial performance reports.