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PHILADELPHIA – A scammer gets convicted for duping credit unions and other financial institutions, and more credit unions move their investment CUSOs in-house were among the top stories this year. For his role in a Ponzi scheme that hundreds of credit unions and others invested $370 million in, Robert L. Bentley was sentenced on Oct. 21 to serve 55 months in prison and ordered to pay $24 million back to investors. Bentley’s case goes all the way back to 2001 when the SEC filed a complaint against Bentley and Entrust Group alleging that from 1994 to October 2001, the defendants sold supposed bank-issued, federally insured certificates of deposits that were actually uninsured securities. More than 200 credit unions, banks and individuals invested more than $370 million with the defendants. According to Frank Mayer, partner with Montgomery, McCracken, Walker & Rhoads LLP, the court-appointed receiver, more than 90% has been returned to investors and $24 million remains for distribution. A number of CUs began moving their investment services out of the CUSO to in-house including $1.7 billion Addison Avenue FCU, $3 billion Wescom CU, $781 million Orange County’s CU, and $964 million Landmark CU. Under 2001′s Incidental Powers Regulations, the SEC has said CUSOs no longer have a networking exemption to receive income without being registered, as CUSOs are no longer a “required service corporation” under the Chubb No-Action Letter and that technically, they have been out of compliance since July 2001. President Bush didn’t receive a lot of ground support for his Social Security reform package but credit unions made their appeal to be included as conduits for retirement savings offerings should the plan move forward. Both CUNA and NAFCU said they will continue to press forward on the Pensions Preservation and Savings Expansion Act even though its co-sponsors – former Rep. Rob Portman (R-Ohio) and Rep. Ben Cardin (D-Md.)-have left Congress. Portman left to become a U.S. trade representative and Cardin said he will retire in 2006. Credit union investments are slightly on par with 2004′s figures, according to Callahan & Associates, Inc. As of June 30, 2005, the latest data, investments are at $205 billion compared to $206 billion in 2004. -

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