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The Office of the Comptroller of the Currency (OCC) said two purported financial institutions, including one with a fictitious credit union name, have been using foreign-hosted websites allegedly designed to perpetuate fraud, including identity theft.
The OCC issued an alert last month after it had been informed by the Florida Office of Financial Regulation (FOFR) that an organization named "Ledge Community Credit Union, N.A." and "Fedro Asset Bank, N.A., or Fedro Bank," were offering banking services through websites. However, an investigation by Florida regulators found these financial institutions, also claiming to be national banks, were not chartered and were not licensed or authorized to conduct banking business in Florida or any other state.
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Ledge Community claimed to have two locations in Jacksonville and one on Fleming Island. The credit union also used the name Flygate Financial. Fedro Asset Bank claimed to have locations in Jacksonville, Orlando, Gainesville and Tampa. The bank also used 13 other names such as Anz Bank, Figs Financial, Skyswift Bank and U.S. Collector Bank, according to the OCC alert.
Ledge Community is not listed on the NCUA's website and Fedro Asset Bank is not listed on FDIC's website.
According to FOFR's investigation, Ledge Community's website showed it was insured by the FDIC. In addition, the website solicited consumers and businesses to open online accounts, and also offered mobile banking, business deposit services and cash management, attorney privilege accounts, treasury services, SBA loans, credit cards, home loans, VA mortgage loans, and USDA business and industry loans.
Fedro Asset Bank's website also offered similar banking services, according to the Florida regulator's investigation.
The credit union's locations, two in Jacksonville and one on Fleming Island, listed on its website, also turned out to be bogus, Florida regulators said. In fact, one of the locations in Jacksonville identified as Ledge Community's "head office," was occupied by a separate and unaffiliated financial institution.
Florida regulators also determined Fedro Asset Bank did not occupy any office locations listed on its website.
The FOFR investigation did not say how long the websites were operating or whether anyone opened accounts or made deposits at these phony financial institutions. However, the Florida regulator said in the cease and desist order that the credit union and bank are required to refund all payments, deposits, charges or fees unlawfully obtained from customers.
Based on its findings, FOFR issued emergency cease and desist orders in December directing both Ledge Community and Fedro Asset Bank to immediately stop offering banking products or services. The cease and desist orders were sent to email addresses posted on the websites of the two organizations.
Ledge Community's website is inaccessible. However, Fedro Asset Bank, or Fedro Bank's, website continued to operate as of Friday afternoon, but some of its pages post a "404 not found error" message.
The bank did not respond to CU Times' request for comment. Ledge Community's email address could not be found, according to Google email services.
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Peter Strozniak
Credit Union Times reporter covering credit union operations, fraud, M&As, leagues, business continuity, and breaking news.
