NCUA Files Civil Lawsuit Against
Ex-Officials of Liquidated
Massachusetts Credit Union
February 14, 2006, Alexandria, Va., -- The National Credit Union Administration, as liquidating agent for the failed D. Edward Wells Federal Credit Union, located in Springfield, Mass., filed a civil lawsuit today against the credit union’s former treasurer, Carol Aranjo; former chairman of the credit union’s supervisory committee, Michael Akers; and others.
The complaint alleges that because of a breach of fiduciary duty and fraud by Aranjo, Akers and others, the credit union failed in 2003 and subsequently cost the National Credit Union Share Insurance Fund more than $2.9 million.
Background
NCUA first placed D. Edward Wells Federal Credit Union into conservatorship February 21, 2003, to conserve the assets of the credit union and to protect the members’ interests. The goal was to return the credit union to a safe, sound operation.
The conservatorship was imposed due to serious violations of the Federal Credit Union Act and NCUA Rules and Regulations and because of the official’s refusal to provide full access to books and records while allowing serious operational deficiencies. Records discovered during the conservatorship established that unrecorded liabilities were concealed from NCUA, the outside auditor and the members.
After determining the credit union was insolvent and had no prospects of returning to viable operations, NCUA transferred its member share accounts to Western Massachusetts Telephone Workers Credit Union, Springfield, Mass., and on May 20, 2003, liquidated D. Edward Wells Federal Credit Union.
The National Credit Union Administration is the independent federal agency that regulates, charters and supervises federal credit unions. NCUA, backed by the full faith and credit of the U.S. government, also operates and manages the National Credit Union Share Insurance Fund (NCUSIF), insuring the deposits of 85 million account holders in all federal credit unions and the majority of state-chartered credit unions.
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