According to an NCUA restraining order, a former credit union CEO who allegedly stole funds through a system of checks and bogus loans at a Pennsylvania credit union has been banned from participate in the affairs of federally insured financial institutions.
While Anne Cruz was CEO of the $2.3 million PNG Northern Federal Credit Union in Vandergrift (southeast of Pittsburgh) from 2018 to 2021, she reportedly used a check kite scheme that included recording and the disbursement of fictitious loans, the NCUA said on Wednesday.
She allegedly used the funds from the bogus loans for her personal expenses and covered up the fraud by manipulating credit union records.
Cruz was fired on Dec. 31, 2021, per the federal agency’s restraining order.
The NCUA did not say how many bogus loans were involved in the scheme, how much money was allegedly stolen or how it was discovered.
“Respondent’s (Cruz) activities have caused significant financial loss to the credit union,” reads the NCUA restraining order. The order did not state the total amount of financial loss.
The federal agency did not say whether the fraud had been reported to law enforcement.
According to NCUA financial performance reports, PNG Northern did not start posting any losses until December 2020, when the credit union posted a loss of over $6,000. In each quarter of 2021, the credit union posted four- and five-digit losses and ended the year with a loss of nearly $60,000.
However, in the first and second quarters of this year, PNG Northern posted losses of $171,663 and $295,410, respectively, according to NCUA financial performance reports.
With the exception of 2018, when the credit union saw nearly 9% loan growth, PNG Northern saw large single- and double-digit declines in 2019 loans in the first and second quarters of this year. .
The credit union has also seen a decline in membership and currently has less than 500 members.
Cruz neither denied nor admitted any wrongdoing, per the NCUA restraining order.