FBI Probing Missing $10M at Kansas Credit Union
The FBI is investigating whether an employee of the former Parsons-Pittsburg Credit Union embezzled $10 million and gambled it away at casinos in Oklahoma and Missouri, according to documents filed in U.S. District Court in Wichita, Kan.
The NCUA took over the $13.5 million, 1,470-member cooperative in Parsons, Kan., in January blaming unsafe and unsound practices. The federal regulator said the violations were uncovered by the Kansas Department of Credit Unions, which seized the credit union and handed it over to NCUA auditors.
In March, the $444 million Golden Plains Credit Union assumed the assets and operations of Parsons-Pittsburg CU, continuing to operate its two branches in southeastern Kansas. Golden Plains CU also retained five employees of PPCU.
CU Times is withholding the name of the former PPCU employee because criminal charges have not been filed. An FBI spokesman said Tuesday the agency would not comment on ongoing investigations.
When questioned by an NCUA examiner, the employee admitted to gambling and reported winnings and losses totaling $16 million in 2012, according to the court documents.
The PPCU employee denied using credit union funds to gamble, the documents said, and told an examiner all deposits were properly recorded on the credit union’s books.
However, state and federal examiners found that approximately $10 million in non-member deposits made into the credit union were missing, court documents show. These deposits were made by other financial institutions into the PPCU account at the Kansas Corporate Credit Union in Wichita. The employee had access to those accounts.
Court documents also show the PPCU employee transferred and controlled more than $730,000 of credit union funds in September 2013. In the same month, the employee spent more than $500,000 at the Downstream Casino resort in Quapaw, Okla., and Harrah’s Casino in North Kansas City, Mo.
From January 2014 to March 2014, the employee spent more than $192,000 at gaming devices at the same casinos and received $57,000 in cash payouts during the same time, according to court documents.
In April, FBI agents searched the employee’s home and confiscated two cashier’s checks, one in the amount of $110,000, and the other in the amount of $20,000. Also seized were eight gold coins, 140 one-ounce silver coins, a 2013 Acura MDX worth approximately $43,000, and a Prada handbag.
Additionally, federal agents seized one bag of documents showing purchases of U.S. Savings Bonds, two boxes of tax records and financial statements, and two bags of IRS W-2G forms for gambling earnings.
PPCU was established in 1951 and served members in Allen, Anderson, Bourbon, Cherokee, Crawford, Labette, Linn, Montgomery, Neosho and Wilson counties.