An Ohio church has alleged NCUA staff committed fraud when they did not allow it to withdraw its funds from the failing St. Paul Croatian Federal Credit Union before the credit union was placed into conservatorship.
The credit union was placed into conservatorship in April 2010 and numerous lawsuits and criminal indictments have followed in its wake. The collapse cost the NCUSIF $170 million.
The church, Holy Love Ministry, of North Ridgeville, Ohio, has sued the agency as agent for the SPC liquidation in an attempt to recover the balance of the more than $1.5 million that the church said it had in two joint accounts with numerous signatories prior to the the liquidation. The church's most recent motion seeks to force NCUA to provide the documents and depositions that the church said will help it prove its allegations.
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NCUA has resisted having to provide documents or have staff deposed on the grounds that the Administrative Procedures Act does not generally allow for discovery in judicial review cases.
The church alleged in its motion before Judge Donald Nugent of the U.S. District Court for the Northern District of Ohio that there was evidence in the administrative records surrounding the liquidation that NCUA staff had acted in bad faith toward the church.
"The Problem Case Officer, Kim Paige, is evidenced to have known of St. Paul's fate and the intentions of NCUA, her employer," the church argued. "She admits in the record that 'We asked Josip Gojevic to let [Joe Plavac] know that he needed to hold out taking this money out until the following week. After the conservatorship later that day, [emphasis in the original] Mr. Plavac was informed he was allowed to take out the same $5,000 per week as the rest of the members."
The church also suggested NCUA staff knew about the upcoming conservatorshp at the same time they urged the church not to withdraw its funds.
"Furthermore, Paige's refusal to allow the refusal was not a spur-of-the-moment decision. Rather, NCUA agents discussed the matter beforehand, once again giving evidence that the agents knew of the impending conservatorship," the church added, citing a conservation as an example. "In a conversation with DSA Skaggs, RD Swann and Ross Kendall, we discussed this situation, and when Mr. Plavac asked for the additional $1 million, Ross Kendall asked if there was any way we could prevent him from taking the money out…This was all done the week prior to the conservatorship."
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