SCRANTON, Penn.—The troubled Valor Credit Union, whose former CEO has pleaded guilty to bank fraud, is seeking to merge with Pentagon FCU.
As CUToday.info reported, the $227-million CU’s former leader, Sean Jelen, currently faces up to 60 years in prison for stealing more than $700,000 to bankroll a lavish lifestyle and pay down personal debts. Jelen was initially fired last year following a drunk driving charge in a credit union-owned Mercedes Benz that he initially declined to return to VFCU.
Jelen was also accused of rigging elections held for the Valor Credit Union board of directors, whereby he elected and subsequently impersonated fictitious members of the board of directors and its supervising committee,
Valor members will receive ballots this week to vote on whether to approve the deal with the $20.6-billion PenFed, based in Alexandria, Va., the Times Tribune reported.
“The board essentially decided it would be best, to best serve the members, to enter into a merger agreement with Pentagon Federal Credit Union,” Andrew Weinberger, Valor’s chairman of the board, told the newspaper.
Valor reported net losses of $2.4 million and $2.25 million in last year’s second and third quarters, according to Call Report data. As a result of the losses last year, Valor had a net worth ratio of 5.54%.
“As you know, the credit union has its struggles,” PenFed Executive Vice President and President of Affiliated Business Shashi Vohra told the Tribune. “But we’re very excited to be in this partnership.”
Valor’s board of directors will remain intact to make local decisions, the Times Tribune reported, noting that PenFed will give the board $500,000 to distribute among local charities at its discretion.