Four former executives with a failed housing finance CUSO havebeen indicted on fraud and other charges for their allegedactivities when working for the organization.

David Jungen, his wife Elaine, Jerome Poelhnelt and DavidChapman were named in a federal indictment unsealed last week inthe U.S. District Court for the Eastern District of Wisconsin lastweek.

The 2009 collapse and bankruptcy of Central States MortgageCompany, a housing finance CUSO, led to creditunion failures and mergers among the its credit union ownersand contributed to the collapse the Members United Corporate Credit Union.

The CUSO which was owned, according to the indictment, byWisconsin- and Illinois- chartered credit unions, the WisconsinCredit Union League Service Corp. and the Jungens themselves, alongwith other individuals.

The indictment alleges that the executives defrauded theorganization and its other owners by allegedly forming a pool ofmortgages in the name of CUSO which then served as an investmentvehicle that allegedly sent interest payments to theexecutives.

The group also was alleged to have closed the fraudulentinvestment vehicle down in June 2008 and to have distributed itssubprime holdings among other, legitimate, CUSO investmentvehicles. The totals allegedly defrauded by the four run to morethan $9.2 million.

In addition, Chapman was alleged to have obstructed justice inthe investigation of the matter by allegedly lying to federalinvestigators.

No comment from the U.S. Attorney for the Eastern District ofWisconsin was available Monday due to the federal governmentshutdown.