Borinquen FCU Fraud Plot Thickens; Unnamed Board Member Allegedly Stole $500,000
Even though Ignacio Morales, former manager of the now-shuttered $7 million Borinquen Federal Credit Union, pleaded guilty this week to embezzling more than $2 million, a volunteer may also face charges in connection with the credit union’s 2011 collapse.
In a Tuesday court appearance, Morales admitted to fraud, embezzlement, money laundering, failing false income tax returns and possession of cocaine with intent to distribute. He faces 10 years in prison at his Dec. 7 sentencing date, but that time could be reduced in exchange for cooperating with investigators, local Philadelphia media reported.
His primary fraud scheme was cashing fake IRS refund checks; Morales collected 20% of the face value, at one time earning $50,000 a month in kickbacks from just one person who cashed nearly a dozen fake checks per week, Prosecuting Attorney Arlene Fisk told the court.
In a related scheme, prior to 2008, Morales created transactions that made it appear the fake IRS refund checks had been deposited into a board member’s account, and then promptly withdrawn. Then, from about July 2009 through June 24, 2011, Morales allowed that board member to withdraw money from his accounts until they were overdrawn to the tune of $500,000, court documents said.
Morales then “intentionally deleted evidence of the deficits” when providing documents to NCUA examiners, the court documents said.
According to Borinquen’s listing on usacreditunions.com, which takes its data from NCUA call reports, as of Dec. 2010 the credit union had just one male board member, Miqueas Santana. A woman who answered a call to the only phone listing for Miqueas Santana in the Philadelphia area said nobody lives there by that name.
Other board members listed include Carmen Montalvo, Sandra Roman and Annette Rosa. Morales was also a member of the board, serving as treasurer, according to the website.
Fisk told Credit Union Times it is “impossible to say” when or if federal prosecutors will proceed with charges against the unidentified board member.
Morales also admitted to several other serious crimes including the withdrawal of more than half a million dollars in an attempt to purchase 15 kilograms of cocaine. Morales told the court he intended to use his share of profits from the drugs to cover up his crimes and throw regulators off his trail.
He also allegedly took $600,000 from the credit union to purchase $1.2 million in real estate for personal use, and additionally stole $700,000 from an organizational member who deposited $1.7 million at the credit union.