PORTLAND, Maine–The former CFO at Portland Police Department FCU has pleaded guilty to filing false NCUA 5300 reports.
The chief financial officer of the former Portland Police Department Federal Credit Union pleaded guilty Friday in U.S. District Court in Portland to a charge of making false entries into credit union records.
William J. Murphy, 75, admitted to filing false quarterly reports between 2009 and 2013 overstating the credit union’s net worth to NCUA in order to make the credit union appear healthier than it actually was, and to make it appear it had enough money to continue to operate when he knew it did not, according to a prosecution document filed with the court.
In May of this year, Murphy reportedly told a federal agent that he had been manipulating the numbers to keep the CU’s net worth ratio form dropping below the 7% floor at which NCUA’s prompt corrective action (PCA) rules would kick in, according to Assistant U.S. Attorney Donald Clark wrote in a document filed by the prosecution.
“At some point, the defendant told the bank’s manager that the PPDFCU’s net worth was at 4%. In an effort to increase the net worth, the manager moved money out of certain members’ accounts at the end of the month and moved the money back at the beginning of the next month,” Clark wrote in the document. “The defendant knew that he was submitting false information to the NCUA in the call reports, but was doing it to keep the PPDFCU afloat. He also knew that the call reports were submitted under oath, and said: ‘We all make mistakes.’”
Court documents show that NCUA discovered suspicious activity in November 2013 during an annual audit, court records state. It was during that audit, according to NCUA, that it was discovered the CU’s manager had between July 1, 2009 and Nov. 26, 2013 embezzled more than $400,000, according to Clark.
Local media reports court document did not identify the manager who allegedly embezzled the funds, nor was it known if any charges had been filed.
Murphy served as the credit union’s CFO, a loan officer, a bookkeeper and an employee. He is free on a personal recognizance bond until sentencing, a date for which has not been set.
The credit union was conserved and merged by NCUA.