NCUA Seeks $11.8 Million Against Deceased Financial Adviser's Estate
According to a published report, NCUA has filed an $11.8 million claim to recoup losses against the estate of a deceased financial adviser who worked with the defunct New London Security Federal Credit Union.
TheDay.com reported today that accounts listing the CU's assets do not exist. NCUA liquidated Connecticut-based New London last summer after determining that the CU was insolvent. That same day, Edwin F. Rachleff, a financial adviser who handled the CU's investments, committed suicide. A NCUA representative was not immediately available for comment on the $11.8 million claim.
According to the TheDay.com, NCUA alleged that between 1988 to 2003 the CU deposited money into an account with Elmore Shore Co., which is or was owned by the Rachleff family. Rachleff allegedly created fraudulent account statements claiming the CU was worth $11.8 million however, that money remains missing.
A June 2008 letter that accompanied a Dec. 10 letter filed with the New London Probate Court showed the CU had investments with the U.S. Fed. Home Loan Banks, U.S. Fed. Home Loan Mortgage Co. and U.S. Fed. Farm Credit Banks. Attorney Kari L. Olson with law firm Murtha Cullina LLP, which is overseeing the probate case, told the news site that the accounts do not exist.
While most depositors' money was covered by federal insurance, several members lost hundreds of thousands of dollars in deposits that were uninsured, according to TheDay.com.