Ignacio Morales, former CEO of the $7 million Borinquen FederalCredit Union, will spend more than seven years in federal prison for embezzling $2.3 million and causing thePhiladelphia institution's 2011 collapse.

Morales was sentenced Thursday by U.S. District Court Judge R.Barclay Surrick in Philadelphia. He also ordered Morales to pay$2.3 million in restitution to the NCUA and to pay restitution tothe IRS of $7.3 million.

Morales pleaded guilty in September to fraud, embezzlement,money laundering, failing false income tax returns and possessionof cocaine with intent to distribute.

Federal prosecutors said Morales used his position as the creditunion's CEO to embezzle more than $2.3 million of BFCU fundsthrough a variety of schemes from 2006 to 2011.

He also cashed hundreds of fraudulent U.S. tax refund checksthrough BFCU, keeping 20% of each check.

Prosecuting Attorney Arlene Fisk told the court that at onetime, Morales was earning $50,000 a month in kickbacks from justone person who cashed nearly a dozen fake checks per week.

Morales also took $600,000 from the credit union to purchase$1.2 million in real estate for personal use and stole $700,000from a member who deposited $1.7 million at the credit union.

He generated fake statements and misapplied credit union fundsto pay dividends on the stolen funds to hide the crime, accordingto court records.

Additionally, he admitted to several other serious crimes inwhich he abused his role as credit union CEO. Court documentsrevealed he withdrew more than half a million dollars from thecredit union in an attempt to purchase 15 kilograms cocaine.Morales admitted in court that he intended to use his share ofprofits from the drugs to cover up his crimes and throw regulatorsoff his trail.

The NCUA issued a cease-and-desist order against the institution on June 6, 2011,and ordered it to obtain a CPA audit as well as verify memberaccounts and reconcile financial statements. It was placed intoconservatorship June 24. On July 8, the NCUA liquidatedthe institution and the $1.4 billion TruMark Financial Credit Unionof Trevose, Pa. assumed what was left.

Borinquen was chartered in 1974 by a Catholic social serviceorganization and served 8,600 members as of June 2011, according toan NCUA release. The low-income credit union served mostlySpanish-speaking members.