A bulletin released this week by the FBI revealed the reason theNCUA seized the $52 million Broome County Teachers FCU ofBinghamton, N.Y., back in June of 2011: loan fraud.

Scott A. Lonzinski, 32, of Clifford Township, Pa., and hismother, Laura Conarton, 46, of Great Bend, Pa., pled guilty Tuesdayin U.S. District Court to fraud in connection to a scheme thatnetted them more than $14 million from 10 loans obtained fromBroome County Teachers.

The loans were secured by fraudulent certificates from a localbank, the FBI said Tuesday. The two created phony documents,including false bank statements, and a fictitious persona to pulloff the scam.

Lonzinski owned and operated a construction business whereConarton worked as manager and bookkeeper, and the loan proceedswere used to finance the business, purchase business vehicles,purchase and remodel Lonzinski's primary residence, acquirepersonal automobiles for Lonzinski, Conarton, and other familymembers, and pay other business and personal expenses.

The NCUA discovered the fraud during an exam, and placed thecredit union under conservatorship. Its assets were purchased by the $3 billion Visions Federal Credit Union ofEndicott, N.Y. in December 2011.

Bank accounts, property, automobiles and cash worth more than $5million have been recovered from the duo, and will be appliedtoward restitution to the National Credit Union Share InsuranceFund, said NCUA spokesman John Fairbanks.

Lonzinski and Conarton both face a maximum sentence of 30 years'imprisonment and a maximum fine of $1 million. Sentencing isscheduled for Lonzinski Dec. 19 and Conarton Dec. 20.