LYNCHBURG, Va.–Three years after Lynrocten FCU here was shut down by regulators due to extensive fraud, some members are still waiting for a payout from their accounts.
According to the News & Advance, a handful of members remain on hold as regulators try to sort through the books of the credit union at which more than $12-million in fraud took place before it was shuttered in May of 2013.
Among those members is Ruby Van Scoten, 90, who was profiled by the News Advance for keeping meticulous, hand-written records. According to the publication, Van Scoten’s notebook shows the last time funds were added to her Lynrocten FCU savings was Jan. 15, 2013, when an $8,300 deposit brought the balance to $229,588.17.
The News Advance said Van Scoten’s “case shows the difficulty of unraveling fraud operations and returning lost savings. With Lynrocten, authorities said the task is complicated by the length of time over which the fraud occurred.”
The fraud was perpetrated by LFCU’s two full-time employees, former lead teller Teresa Humphries and branch manager Linda Sue Newcomb, both of whom have been convicted of a years-long embezzlement. Both are now in federal prison. Van Scoten’s nephew, Arthur Newcomb, was married to Linda Sue Newcomb, and often personally picked up her deposits.
NCUA reported it has paid out $9.4 million to 1,132 accounts, but 32 remain outstanding, about two-thirds of which represent less than $10 each.
Of the 32 remaining accounts, two-thirds have balances of less than $10.
Van Scoten told the News & Advance that the CU’s records show loans in her name, even though she never borrowed any funds. She reported that several days after the closure she received a letter from NCUA asking her to confirm a savings account balance of $228,700, as well as $42,000 in three loans. Van Scoten confirmed the savings balance, but challenged the loan amounts. She told the News & Advance she was extensively questioned by the FBI and NCUA, and she continues to wait for an answer.
“They kept coming by to ask me questions,” Van Scoten told the News & Advance. “I felt harassed. All I did was put my money (in Lynrocten). It’s the craziest thing I’ve ever seen.”
An NCUA spokesperson said the agency is “continuing to work to settle matters with respect to the Lynrocten Federal Credit Union…”