A man convicted of defrauding the $2.8 billion, 202,000-memberLake Michigan Credit Union has sued the Grand Rapids, Mich.,credit union, he says on behalf of the members, because the creditdid not have policies in place to detect his fraud.

Michael Bruce Vorce pleaded guilty in October 2009 to two countsof a 15-count indictment alleging he and other conspirators haddefrauded Lake Michigan Credit Union, the Michigan State UniversityFederal Credit Union and 13 banks for a total of roughly $24 million.

Lake Michigan CU's part of the $24 million was $4.7 million andVorce was sentenced to 12 years in federal prison for his part inthe scheme.

In his lawsuit filed in U.S. District Court, Vorce said he filedthe suit on behalf of the credit union's members who, he argued,were victims of the credit union's failure to prevent the fraud.

“The members have been victimized by the LMCU defendant's'stunning failure to properly and lawfully operate a federallyinsured financial institution,” Vorce wrote in his complaint,adding the members are “forced to bear the economic consequences oftheir misconduct which persists to this day.”

According to the indictment, Vorce used fraudulent tax returnsand other documents to obtain loans and lines of credit from thecredit union and other financial entities and then used newfraudulently obtained loans to pay off the ones comingdue.

His cover was to be running a business buying and selling boats.He alleged in his lawsuit that credit union staff did not check onwhether he had ever filed the fraudulently filled out returns withthe IRS, which he had not, even though he said he gave thempermission to do so.

He also alleged that he used fake serial numbers to let himclaim to have purchased boats that he had not purchased nor everexisted and these, too, he said, were never checked.

The credit union has not yet commented on the suit.