SPRINGFIELD, Mass. — The federal grand jury trial of former D.Edward Wells president/CEO Carol Aranjo and her husband, AlphonsoSmith for conspiracy, tax evasion and embezzlement that led to theliquidation of the CU continued here last week.

According to a report in The Republican, former CU Board MemberWilliam H. Zachery Jr. told the jury that loan files were missingwhen he conducted an audit. Among the missing files were Aranjo'smortgage, loan documents in her two sons' names, and a loan to aformer fraternity brother of board member Michael Akers, Zacherytestified. Others loan files were incomplete, lacking applicationforms and other paperwork, he said.

An NCUA official testified that Aranjo had a $150,000 negativebalance in her accounts and a $30,000 shortfall in her husband's by2000, the same year the credit union suffered a $225,000 operatingloss, The Republican stated.

Assistant U.S. Attorney Karen L. Goodwin said that a $2 millioninsurance settlement with inner city communities provided the meansfor Aranjo to addle elder board members who paid little attentionto financial details and forestall discovery of missing funds. TheNCUA conserved the CU in 2003.

“I didn't care to read a lot of business things,” said ElizabethBryant, 80, a retired day-care teacher who served as boardpresident in the late 1990s. “I was supposed to, but I didn't.”Bryant did notice how previously amicable relations with thefederal regulator had turned nasty, however. In 2000, Aranjoforbade examiners access to records and filed a restrainingorder.

The trial is expected to last for several more weeks. Ifconvicted, Aranjo faces 14 years in prison.

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