The NCUA said Kaufman’s misconduct spanned from 2011 and up to 2016 when he was fired by the Melrose board following an internal investigation into his alleged financial improprieties and policy violations. By July 2019, a New York grand jury indicted him on bribery charges.

U.S. District Court Judge Nina R. Morrison in Brooklyn approved the final judgment order based on a report released in January by Federal Magistrate Judge Taryn A. Merkl. She recommended that Kaufman forfeit his compensation and insurance policy after the NCUA filed a motion for summary judgment to decide the case without a full trial because there were no genuine disputes of the key facts in the federal agency’s lawsuit.

Those key facts included Kaufman’s criminal conviction for accepting illegal gratuities from Tony Georgiton, owner of a taxi medallion brokerage company and other businesses, and from CBS Radio.

After Georgiton bought a Jericho, N.Y., home where Kaufman lived rent free for more than two years, the former credit union executive personally approved tens of millions of dollars in Melrose loans, including 50-year amortization loans that were particularly favorable to Georgiton's companies and to Melrose’s detriment. Kaufman purchased the home with an unsecured loan from Georgiton and a $240,000 loan from Melrose co-signed by Georgiton, but Kaufman never made payments on the latter loan.

Kaufman also inked a questionable $2 million naming rights deal for a local entertainment venue that was owned by one of Georgiton’s businesses. The NCUA claimed the naming rights agreement had little to no value for MCU.

Kaufman also accepted luxury vacations from CBS Radio, which offered an “incentive vacation plan” that offered clients fully paid vacations for increasing their companies’ spending on advertising with the radio network. Although Melrose regularly advertised on CBS Radio, its advertising budget significantly increased during the period Kaufman received vacations from 2010 to 2015. In 2012 alone, Melrose spent $620,000 with CBS Radio.

During Kaufman’s trial, federal prosecutors argued these trips were not standard business expenses, but rather an illegal gratuity tied to advertising spending. Additionally, under MCU’s bank bribery policy, employees were prohibited from accepting gifts of more than $100 from vendors without the board’s approval, which Kaufman never received.

It should be noted that CBS Radio was not sued by the NCUA and was not named as a defendant in the civil lawsuit. Moreover, no allegations were made against CBS Radio and the Kaufman case did not suggest CBS Radio was investigated or penalized for offering these incentive trips.

In response to the civil lawsuit, Kaufman denied that his actions constituted a breach, arguing that he acted with the acquiescence and approval of several Melrose board members. He also claimed the Georgiton loans were consistent with Melrose policies and profitable for the credit union, and the vacations from CBS Radio were legitimate business trips rather than improper gifts.

Because there were no quantifiable damages, the breach of fiduciary duty claims should fail, Kaufman stated.

The former CEO also stated the faithless servant doctrine should not apply because his misconduct did not “permeate” his entire tenure at Melrose, and that forfeiture of his full salary was excessive since not all his work was disloyal.

Kaufman’s lawyers did not respond to a CU Times request for comment.

READ MORE: NCUA v. Alan Kaufman-Final Judgment Order.