NCUA Seeking Millions from the Melrose CEO for Breach of Duties
ALEXANDRIA, Va. (Aug. 7, 2018) – The National Credit Union Administration Board, under an infrequently used authority, has filed administrative charges against Alan S. Kaufman, former chief executive officer, treasurer, and board member of Melrose Credit Union.
The NCUA is seeking a prohibition order against Kaufman and is requesting he be ordered to pay restitution of at least $3.5 million. In addition, the NCUA Board assessed Kaufman with a civil money penalty of $1 million.
The seven-count notice of charges was filed with the Office of Financial Institution Adjudication. The NCUA alleges that Kaufman breached his fiduciary duties to Melrose by placing his own interests above those of the credit union, that he engaged in unsafe or unsound practices, and that he violated applicable laws and regulations. The notice further alleges that Kaufman benefitted from his actions and that he caused “severe financial loss” to Melrose.
“These practices and breaches involved personal dishonesty by Kaufman and demonstrated Kaufman’s unfitness to serve as a director, officer, and to otherwise participate in the conduct of the affairs of an insured credit union,” the charges state.
Kaufman joined Melrose in 1984 and, in 1998, became CEO, treasurer, and a member of the board. On July 5, 2016, the Melrose Board removed Kaufman from his position as CEO of Melrose and later that year, Kaufman was removed as a board member and secretary for Melrose.
NCUA is the independent federal agency created by the U.S. Congress to regulate, charter and supervise federal credit unions. With the backing of the full faith and credit of the United States, NCUA operates and manages the National Credit Union Share
Insurance Fund, insuring the deposits of account holders in all federal credit unions and the overwhelming majority of
state-chartered credit unions. At MyCreditUnion.gov, NCUA also educates the public on consumer protection and financial literacy issues.