PONTIAC, Mich.–The credit union at which the former CFO allegedly said he embezzled more than $20-million has been placed into conservatorship.
The director of the Michigan Department of Insurance and Financial Services on Wednesday placed Clarkston Brandon Community Credit Union into conservatorship and appointed NCUA as conservator.
The conservatorship follows allegations of fraud at the $69-million CU. Michael LaJoice, 36, the former CFO at Clarkston Brandon Community CU, has been charged with 14 felonies related to recent alleged thefts from CBCCU. LaJoice allegedly said he had been embezzling from the credit union from 2003-2015.
Late last week LaJoice reportedly walked into an Oakland County (Mich.) Sheriff’s Office and admitted to the theft to police, who said “We weren’t even aware of this until he came forward.” The fraud was reportedly discovered during an audit at the credit union on Jan. 4.
Tuesday the credit union's CEO, Donna Bullard, stated the CU was "appalled" by the alleged crime, and assured members that the CU was open for business and that their money was safe.
The Michigan Department of Insurance and Financial Services placed Clarkston Brandon Community Credit Union into conservatorship due to unsafe and unsound practices at the credit union, NCUA stated in a release. While continuing normal member services, NCUA said it will work to resolve issues affecting the credit union’s operations. Members can continue to conduct normal financial transactions, deposit and access funds, make loan payments and use shares.
LaJoice was arraigned on 14 charges that include unlawful withdrawal and conversion for his own use of $1.9 million in credit union funds, including placing them in his personal accounts between Oct. 22 and Dec. 16. Court documents indicate that withdrawals of $100,000, several on the same day, were made. LaJoice has entered a not guilty plea in Clarkston District Court.
According to investigators, the embezzled funds were used to support a lifestyle “that exceeded the man’s $65,000 annual salary, including a $1.3 million, 5,800-square foot home. The suspect also started and heavily promoted a private business, one of several he told others he planned to build over the next decade.”
The credit union made money each of the last five years, and at the close of September the institution's capital stood at 8.57%, according to the CU's Call Report.