LOUISVILLE, Ky.– A second lawsuit has been filed against the now-closed Louisville Metro Police Officers Credit Union and a former vice president.
The latest lawsuit alleges that the former VP, Josephine Crowe, who allegedly defrauded the credit union of more than $2 million, had a previous civil judgement filed against her by another credit union, but that LMPOCU hired her anyway, according to WAVE.
In late June, the Kentucky Department of Financial Institutions appointed NCUA as liquidating agent of the then $28-million Louisville Metro Police Officers CU, and arranged an assumption by the $1.1-billion Commonwealth Credit Union in Frankfort, Ky. The FBI is currently investigating what took place at LMPOCU.
According to WAVE, the new lawsuit suggests methods by which Crowe allegedly stole money, but also faults the credit union itself for a series of failures, alleging LMPOCU
knew of the alleged fraud and did not alert its members until five months later. Moreover, the lawsuit alleges the credit union made only a statement on its website, putting the responsibility on the members to find out whether their accounts had been affected, and then “did nothing for the next five months ‘keeping members in the dark’ about what was happening with their accounts,” WAVE reported.
Other Allegations
The lawsuit further alleges 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, according to WAVE, which said it interviewed some former members who said they are missing funds, even though the credit union is federally insured.
The lawsuit 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, WAVE said. The lawsuit further names three defendants and states at least 10 fictitious loans were created in each of their names.
The plaintiffs are also alleging 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,” WAVE quoted the lawsuit as stating.
‘Absolutely Horrible’
An earlier lawsuit was filed by attorneys Andrea Hunt and Allan Cobb, who told WAVE, “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 unions such as this one. 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.”