Louisville, KY – 19 September 2018 – A second lawsuit has been filed against a former vice president at Louisville Metro Police Officers Credit Union and it’s former vice president, Josephine Crowe. The lawsuit states Crowe had a previous civil judgement filed against her by another credit union, but that LMPOCU hired her anyway.
The FBI has been investigating and new estimates of the alleged theft total more than $2 million, according to sources close to the investigation.
Now, a second lawsuit had been filed. The new lawsuit not only explains how Crowe allegedly stole money, but points the finger at the Credit Union for a number of actions.
The lawsuit claims the Credit Union knew of the alleged fraud and did not alert its members until five months later. The documents states the Credit Union made a statement on its website, putting the responsibility on the members to find out whether their accounts had been affected.
The lawsuit states the Credit Union did nothing for the next five months “keeping members in the dark” about what was happening with their accounts.
The lawsuit claims, members have not been able to get statements of their own accounts with the credit union or any other personal financial information regarding their own information including their direct deposits or loan payment information.
Some people we spoke to said they are still out the money, even though the credit union is federally insured.
The lawsuit also claims Crowe was creating fake loans in member’s names, diverted electronic transfers to accounts she controlled and committed other improper acts with their accounts. This lawsuit names three defendants and states at least 10 fictitious loans were created in each of their names.
It blames the Credit Union for not keeping the records they should, and for lacking proper oversight to prevent fraud from happening.
It states the credit union had plenty of warning against Crowe before even hiring her, noting Crowe had filed for bankruptcy twice, had the IRS seize thousands of dollars from her banking accounts, had a home in foreclosure, had federal and state tax liens filed against her and was the source of a civil judgement entered by another credit union. It also states that during her employment, Crowe received more tax liens and foreclosed on yet another home.
LMPOCU had $28 million in assets and was founded in 1942. Its members were mostly comprised of law enforcement officers.
The credit union in assets were liquidated by the National Credit Union Administration (NCUA).
The 3,349 members of the credit union are now members of the Commonwealth Credit Union, which also took over all shares, loans and other assets
An investigation determined the Louisville Metro Police Officers Credit Union was insolvent and “had no prospect for restoring viable operations,” according to a release from the NCUA.
A previous lawsuit was filed in March by attorneys Andrea Hunt and Allan Cobb. They told WAVE 3 News what was happening at the credit union was outrageous.
“It’s absolutely horrible and it’s a terrible lack of transparency by the credit union and the National Credit Union Administration which overseas and supervises credit union as this one,” stated plaintiff’s Attorney Andrea Hunt. “It is our understanding that there are at least three levels of insurance available to the effected members and to date no one from either LMPOCU or the NCUA has come forward to assist the members with their financial hardships and that’s why we filed the lawsuit to get transparency and make our members whole.”
The attorneys explained their clients have not received any of their money back, even though the credit union was federally insured.
“It’s shocking and quite frankly the more we meet with clients, the more we uncover, we’ve never seen anything like this before,” Hunt said.
“From the National Credit Union Administration, to the credit union’s board of directors, to everyone involved, our clients are out money and their credit is wrecked because of it,” Cobb added.
Source: Wave 3 News
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