Mark Fetcher doesn't care why New London Security Federal CreditUnion failed back in 2008.

He just wants his money.

July 28 marked the fifth anniversary of the collapse of the NewLondon, Conn.-based credit union. The same day the NCUA seized thecredit union, 82-year-old Edwin F. Rachleff, who was the A.G.Edwards broker who handled the credit union's investments,committed suicide by jumping off an apartment building. Roughly $12million was lost partly as a result of Rachleff'smismanagement.

“(I'm) amazed, upset, disturbed and shocked that it is takingthis long for me to get my money back. That's money that can't beaccounted for,” Fetcher said. “I don't really care what happenedand who's really involved. I just want my money.”

Fetcher, 59, would not say how much he is due, but did indicatethat he had a substantial amount of money in multiple accounts atthe credit union. He said within a week after New London's closure,he received $100,000 for one account that fell within the NCUA'sinsurance limit.

While it's not uncommon for the NCUA to liquidate financiallytroubled credit unions, it may be unusual that recoupment tomembers can drag out for five years.

Up to now, delays have largely been caused by various attemptsat mediation, settlement of the case and disposing of someadministrative claims involving the case, said John Fairbanks, NCUApublic affairs specialist. In addition to depositions being delayeddue to scheduling conflicts on both sides, people to be deposed whoare in Connecticut, Missouri and Texas have slowed the proceedings,he added.

“We expect to depose six to eight people and potentially more ifadditional information comes to light,” Fairbanks said. “The trialdate will depend upon whether discovery can be completed within thepresently scheduled time.”

A material-loss review from the NCUA's Office of InspectorGeneral released in late 2009 found that the agency's examinersfailed to adequately evaluate the risk in New London's investmentprogram. The OIG also said New London's collapse was caused byseveral factors, including the lack of a safekeeping and custodialagreement with a third party independent of the accountmanager.

Investments accounted for more than 90% of the credit union'sassets. While NCUA examiners noted the high concentration ofinvestments and the lack of controls over investments, includingthe lack of a safekeeping agreement, they failed to elevate theserepeated issues for stronger supervisory actions, the OIG said.

A.G. Edwards & Sons Inc. merged with Wachovia Securities,which in turn merged with Wells Fargo. In January 2009, Wells Fargo was named as a defendant in a suit filed by theNCUA that sought to recover the $11.8 million, which was supposedlydeposited into New London's account from 1998 to 2003. In March2009, the NCUA also filed an $11.8 million claim to recoup lossesagainst Rachleff's estate.

In March 2010, the NCUA additionally filed suit against Beller Shepatin and Co., the accounting firm it claimed failedon several counts to detect fraudulent activity in an investmentaccount held by New London. In September 2007, Beller Shepatinmerged with Ed Lorah and Associates LLC, which was named as thedefendant in the complaint.

Seeking to claim $4 million in losses, five members filed a suit in July 2010 against several entitiesthey said were responsible for the losses including five New Londonboard members, a credit union manager, Wells Fargo Advisors,Beller, Shepatin and Co., Rachleff's wife, Naomi, who was executorof her husband's estate, and a law firm that served as generalcounsel to the credit union. A federal court later dismissed the suit for failing to filewithin the six-month deadline window after the NCUA board deniedtheir initial administrative claim.

The most recent update came in December 2011 when a Connecticutdistrict court dismissed a suit filed by Wells Fargo Advisors LLC against several former New Londonboard members alleging negligence by Rachleff. The court said astate statute on joint liability in third-party negligence thatWells Fargo presented in its case did not apply because all allegedlosses were purely commercial in nature.

Next Page: Staying in Touch

As the lawsuits have flown in and out of court over the pastfive years, Fetcher said he has kept in touch with an NCUAattorney, who encouraged him to touch base each quarter. Fletcherdid not provide the name of the attorney. The last time they talkedwas in July, he said. 

“I've been told that (the case) is in discovery. I was toldthey're looking at a trial date in January 2014,” Fetcher said. “Itgives me some hope.”

Fetcher recalled the day he heard the credit union hadcollapsed. Returning to his hometown of New London from a vacationin Florida and anxious to power up his laptop to catch up the localnews, right there on the front page of The Day was a story on thecredit union's seizure and Rachleff's suicide.

“Honestly, the first thing that went through my mind was 'whatabout my money,'” said Fetcher, who previously worked as apurchasing agent for a wholesale distributorship and retired in2001.

That night, he started calling New London board members andothers in the community to find out more. The next morning, withpassbooks in hand, he drove to the credit union's office, which washoused in the office of a law practice. Representatives from theNCUA's Asset Management Assistance Center office in Texaswere on site packing up files and other items.

“I walked in, introduced myself and asked a woman there if shecould do me a favor. I showed her my passbooks and asked if thedollar amount matched the credit union's ledger amount,” Fetcherrecalled. “The woman went in the back, checked and said other thansome interest income that had not been posted, the numbersmatched.”

Relieved, the kicker came seconds later.

“'Oh by the way,' the woman said, 'you were only insured up to$100,000',” Fetcher said. “And I said, 'what?'”

Dumbstruck, he said he made a few phone calls to accountant andlawyer friends to get their opinion on the insurance coverage.Fetcher said they too, were shocked.

“If I had ever been notified I was underinsured, I would'vemoved the money out of my accounts,” Fetcher said.

Doing so would have meant severing long-time ties with NewLondon. Fetcher said he'd been a member of the credit union sinceJune 1, 1983. Both his parents and grandparents were members. Hisfather, who died in 1987, once served on the board.

“The credit union was started in the mid-1930s. Back then, banksdid not loan money to Jews so they opened up this credit union,”Fetcher said. 

He also shared a joint account with his mother, who died in2002. The funds in that account exceeded the NCUA's insurancelimit.

Fetcher said he's upset with Wells Fargo for trying to drag thecase out for as long as possible until the plaintiffs becomeexhausted with pursuing their funds. A request for comment fromWells Fargo was not returned.