Vytautas Kliorys, board president of the $23.6 million TaupaLithuanian Credit Union who was dismissed when the institution wasliquidated by the NCUA July 12, provided new details about thefailed credit union's governance.

Kliorys, who took over as president of the board of theCleveland-based institution in April 2012, spoke with CreditUnion Times to dispute comments made in a previous story byanother board member.

He said he disagreed with statements that volunteers were duped by former CEO Alex R. Spirikaitis, whoallegedly defrauded the credit union and caused its failure.Spirikaitis remains a fugitive.

Court documents state Spirikaitis forged deposit account statements from the credit union'saccounts at the $4.5 billion Corporate One Federal Credit Union,and used the stolen money to construct a $1.5 million home.

While the former head of the board agrees that Spirikaitisallegedly committed fraud, Kliorys said it was the credit union'sthird-party audit firm and examiners who were duped, notvolunteers.

“The board believed that it had all the procedures in place toprevent this sort of event,” he told Credit Union Times.“We had received excellent or very good reports from the annualstate exams and NCUA's most recent exam last summer, and we hadeven gone a step further than required and used an outside CPAfirm to perform annual independent audits.”

All three entities concluded the credit union was in good shape,and there was no hint or suggestion that any embezzlement orinappropriate financial transactions were being conducted bySpirikaitis, he said.

Furthermore, Kliorys said, it was the responsibility of theoutside auditors to review and confirm the Corporate Onestatements, not the board's.

“The corporate credit union bank statements, which wereapparently manufactured by the manager, were never presented to theboard,” he said.

Vincas Urbaitis, a 25-year volunteer who retired from the TaupaLithuanian board in 2011, incorrectly told Credit UnionTimes that Kliorys was turned away by the NCUA after heattempted to enter the credit union after it had been seized,Kliorys maintained.

“I went to the credit union's office a few days after theclosing,” Kliorys said. “The NCUA regulators immediately agreed totalk to me.”

However, he said, since then volunteers have not had access tothe credit union or any of its records. Kliorys said he has beentold by NCUA officials that it could take up to six months for theregulator to complete its full forensic accounting process andreveal the full extent of the fraudulent activity.

Spirikaitis has been on the run since July 16 following whatpolice thought was a standoff at his Solon home. However, whenauthorities entered the home the next morning, he was not there.The FBI said he was last seen in Cleveland as well as the suburbsof Solon and neighboring Twinsburg and may have fled to Canada.

According to U.S. District court documents, a FBI special agenthand delivered a “notice of complaint for forfeiture” and other foreclosurepapers on Aug. 7 to Julie A. Spirikaitis, his wife and co-owner ofthe home.

The FBI has also posted a foreclosure notice at the home inSolon, about 25 miles southeast of Cleveland. The notice gives Mrs.Spirikaitis about a month to respond to the foreclosure complaintin U.S. District Court in Akron.

In November 2012, Spirikaitis moved into the new home with hiswife and their two children. The construction of the home, whichtook a year, was first paid for with two checks totaling $100,000from Spirikaitis' personal account at Taupa Lithuanian, accordingto court documents.

“All remaining checks—totaling approximately $1,555,132—camefrom Spirikaitis in the form of Taupa Lithuanian Credit Unionofficial checks,” the documents state.