MADISON HEIGHTS, Va.–A 90-year-old woman has filed suit against NCUA as part of the agency’s liquidation of a credit union in 2013.
Ruby Van Scoten filed the lawsuit to recover $227,574 that was on deposit at Lynrocten Federal Credit Union in Lynchburg, Va. That credit union collapsed due to internal fraud, with members of its management team now doing prison time following convictions.
According to the News & Advance, Van Scoten requests NCUA overturn their decision, pay out her insurance claim and “award any relief as is deemed just and proper.”
The suit states that in the days after the CU was closed Van Scoten filed an insurance claim for her account balance with the agency for what she said was her life’s savings. She had originally opened her account in 2002 at a time when LFCU was managed by Linda Sue Newcomb, who was married to Van Scoten’s nephew, Arthur Newcomb.
Linda Sue Newcomb, along with teller Teresa Humphries, were both convicted of embezzlement and other crimes. Arthur Newcomb has not been charged.
The suit alleges that Van Scoten permitted Arthur Newcomb to make several withdrawals and redeposits as part of 0% loans between 2005-11, and that he further granted him right-to-survivorship to her account in 2009.
But in her complaint Van Scoten said it was not her desire to name him joint owner on the account, even though such a change was made.
“[The NCUA] is trying to steal her money,” Arthur Newcomb was quoted by the News & Advance as saying. “It wasn’t my money in that account. The only reason my name was on there was so I could take care of things if something happened to her.”
According to the News & Advance, on Sept. 30, 2016, Van Scoten received a letter from the agency confirming her balance of $227,574. However, Arthur Newcomb’s net negative balance of $249,256 on another account and an additional $16,656 in loans resulted in no funds being returned to Van Scoten because Newcomb is listed as a co-owner of Van Scoten’s account, according to the NCUA letter.
Van Scoten’s suit alleges the credit union did not properly designate Arthur Newcomb as a co-owner of her account and therefore she is owed the balance of her account.
NCUA said in a statement to the News & Advance that it is reviewing the complaint.