WASHINGTON-The U.S. District Court for the District of Columbia will begin hearing a fraud case next week concerning American Samoa Government Employees Federal Credit Union. Former Manager Bernard Gurr has been brought up on 20 charges, including embezzling, conspiracy, lending fraud, filing false reports, obstructing an investigation, witness tampering, and other issues. Three other former employees pled guilty to one count each of making false entries in credit union reports. They are awaiting sentencing. The trial is expected to last approximately three weeks and consist of more than 30 witnesses, according to NCUA Counsel Steve Widerman, who will serve as one of the witnesses. Judge Thomas Hogan will preside over the case. However, the case has already hit a snag. Not enough potential jurors showed up on March 20 to pick a jury. At press time, the parties were still sifting through a new jury pool. American Samoa, with $9 million in assets and 1,400 members, was placed into conservatorship in October of 1993 by the NCUA and liquidated in 1994 by the agency, Widerman said. The field-of-membership consisted of government employees of American Samoa, two church groups, and another employee group. It was the only credit union on the island. Gurr was jailed briefly at the airport in Hawaii for stealing the credit union's documents in December of 1999. The 20 charges brought against him in May of 2000 have superceded the original charge. Judith Kozlowski of the U.S. Attorney's Office will be prosecuting the case. Joseph Conte of Bond, Conte, and Norman is serving as defense counsel. According to former Financial Standards Group (FSG) Certified Public Accountant Consultant Barbara Loescher, part of the problems with the management of American Samoa could have been cultural differences. She remarked that it was "like going to another world," when she was assigned to perform an external audit for the troubled credit union. "There were practices there that you just wouldn't see in the mainland," Loescher said. "It was totally different from any credit union I'd ever been in." She explained that in the tiny island country there was a system of chieftains running everything, similar to a feudal system of government. Loescher suggested that maybe Gurr considered himself the "big chief" of the credit union. "When we were in that credit union, documentation was very incomplete.," she noted. "Whether it was poor bookkeeping or intentional, I don't know." Loescher left FSG prior to the conclusion of the audit. Denise Yuh, who completed the investigation Loescher began, was unavailable for comment. -firstname.lastname@example.org
Fed court to hear CU fraud case
Want the latest credit union news?
Sign up for our free newsletter today! All the breaking credit union news and information you need to make the right decision for your credit union delivered to your inbox. For free!
Thanks for subscribing, you will start receiving the Daily News Alert tomorrow!