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Investigating documents for fraud and corruption Source: Shutterstock.

For the first time, court documents revealed new details and allegations of widespread fraud and corruption that occurred at the $3.2 billion Municipal Credit Union. According to those court documents, those involved included its CEO, at least five top executives, two supervisory committee members and 13 former board members; the scheme led to more than $18 million in financial losses and $109 million in write-down losses.

The court documents came from a lawsuit filed in Wisconsin federal court in May by the conserved credit union and the NCUA. They are suing CUMIS Insurance Society because the Madison, Wis.-based organization has refused to pay a $9.8 million interim insurance claim to cover some of the losses from former MCU President/CEO Kam Wong. He was sentenced in June 2019 to five and a half years in prison after he pleaded guilty to embezzling nearly $10 million from New York City’s oldest financial cooperative. Although CUMIS has acknowledged the NCUA’s demand for the $9.8 million payment, the organization denied it owes this amount because of Wong’s embezzlement, according to court documents.

Peter Strozniak

 

Credit Union Times

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