SPRINGFIELD, Mass.- Charges have yet to be filed after more than two years since D. Edward Wells Federal Credit Union was liquidated following allegations that top officials bilked the community development credit union out of cash and made inappropriate loans to insiders for millions. According to a report in The Republican appearing on www.masslive.com, charges have not been filed yet against former CEO and Treasurer Carol Aranjo and other former credit union officials for fraudulent activity. Credit Union Times previously reported (CU Times, May 28, 2003, p. 6) that the former credit union head shifted funds from other accounts to cover her own overdrawn accounts by $71,470-and others totaling more than $1 million-according to NCUA documents filed with a court when the credit union unsuccessfully attempted to obtain a temporary restraining order against NCUA. The agency also said that D. Edward Wells made an illegal loan for 33% of the credit union’s total assets and 424% of its net worth that was not disclosed on the books, failed to reconcile its main operating account with Fleet Bank since May 31, 2002, and withheld its financials from NCUA examiners. Shortly before the failed TRO attempt, the National Federation of Community Development Credit Unions wrote NCUA complaining the credit union had not returned the principle of its share certificate upon maturity after several requests. Aranjo is a former NFCDCU chair. Executive Director Cliff Rosenthal was not available for comment at deadline. The credit union was placed into conservatorship in March 2003 and liquidated after NCUA determined it could not recover from its insolvency in May 2003. According to The Republican, the credit union had a $3.4 million deficit. Western Massachusetts Telephone Workers Federal Credit Union, now Freedom Credit Union, took over the D. Edward Wells accounts. “To date the investigation has demonstrated probable cause to believe that Aranjo committed various crimes, including, but not limited to, bank fraud,” The Republican quoted a recently unsealed FBI affidavit as stating. The affidavit was filed in relation to a Dec. 8, 2003 search warrant for the home and offices of city contractor Frank Ware, Jr., who is the subject of a federal corruption probe in Springfield; former homeless shelter director Francis G. Keough III; and Fred A. Swan, retired director of the former Springfield Southwest Community Health Center, now the Caring Health Center. The affidavit also said that Aranjo’s husband had negative balances of over $100,000 in his accounts; Aranjo’s son’s construction company had a negative balance of $41,104 and got a `free’ bank check for $22,172 to buy city property; Northern Education Services, run by Norma Baker, an associate of Aranjo’s, received a $40,000 check for her organization without record of payment; Northern Star Development Corp., a company of Ware’s, received a $600,000 loan of which there is no record and the loan exceeds the statutory limit for a loan to one borrower; Aranjo also permitted a community development loan to be used to pay off a delinquent Northern Star loan; funds from the Massachusetts Life Insurance Community Investment Initiative were also used for a loan to Hilltop Construction, another Ware company; the credit union never recorded a $1.5 million loan from Mass. Life, but recorded the first half as a deposit; and Aranjo transferred $50,000 from the Mass. Life loan to the credit union’s secondary capital account to make the credit union’s cash position look better. The affidavit also outlined a convoluted scam for which the National Credit Union Share Insurance Fund had to pay out $100,000. Southwest Community Health Center purchased a $100,000 CD at Fred Swan’s insistence, $59,921 of which was transferred to Aranjo’s son’s construction business. Swan said the transfer was not authorized and the NCUSIF returned $100,000 to the health center. The Republican said that Mass. Life Senior Vice President Charles Grigsby said the agency had reimbursed the organization $750,000 of its loan. After more than two years, no one has been charged with anything. The FBI is working with the IRS and NCUA on the investigation. NCUA Director of External Affairs Nicholas Owens said it would be inappropriate to comment at this time. [email protected]

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