WASHINGTON — Rep. Bennie Thompson said he is seeking “transparency and accountability” from NCUA following the liquidation of Jackson Area FCU here in the wake of one of the biggest embezzlements in credit union history.
Jackson Area Federal Credit Union, whose former CEO pleaded guilty this week to theft of funds from a federal credit union, making false statements to a federal credit union and filing false tax return in connection to the embezzlement of more than $69 million from JAFCU, has been merged into Dothan, Ala.-based Five Star Credit Union.
NCUA placed the deeply troubled JAFCU into conservatorship in May and has been going through its books ever since. Former CEO Leigh Bridges now faces up to 70 years in prison and millions of dollars in fines when she is sentence Feb. 25 of 2027. U.S. Magistrate Judge LaKeysha Greer Isaac set Bridges’ bond at $25,000 during a preliminary hearing. Jordan kept the bond in place, allowing Bridges to remain free pending sentencing.
The Big Question Remains
The big question many have—and CU Daily readers have raised repeatedly—is how the embezzlement could go on for what NCUA said has been decades without anyone catching it. Rep. Thompson, a Mississippi Democrat, said he has asked NCUA that same question.
“My office will continue engaging with NCUA to ensure there is full transparency and accountability regarding what occurred, how members were affected, and what steps are being taken to protect them moving forward,” he said.
Thompson said that for now the agency has assured his office that members transferring to Five Star would experience no interruption in service and that federally insured accounts remain protected through the National Credit Union Share Insurance Fund.
“Members deserve a transition that is orderly, transparent, and protects their access to their money,” Thompson said in a statement.
Ailing Financials
As the CU Daily reported, on Sept. 30 NCUA facilitated a partial purchase and assumption agreement under which Five Star purchased certain Jackson Area assets and assumed its member share accounts,
As of its mid-year 5300, JAFCU was reporting $60.8 million in assets, 15,704 members and a whopping $103 million loss and -145.63% net worth. What JAFCU’s ultimate cost will be to the National Credit Union Share Insurance Fund has not yet been determined.
Reporting to Date
The CU Daily’s reporting to date on Jackson Area FCU can be found below:
CU That is Subject of One of Biggest Embezzlements in CU History Being Merged into Five Star CU
Forensic Auditor IDs $73M in Losses Due to Alleged JAFCU Embezzlement, New NCUA Filing States
Judge Schedules Settlement Conference in JAFCU Embezzlement Case as Agreement is Sought
Ex-CEO Who Allegedly Misappropriated $95M From CU Repeatedly Invokes Fifth Amendment Rights
Conserved JAFCU Posts $12M Loss in Q2; Net Worth at -145%
Judge Issues Freeze on Assets in Case Involving Alleged $95M Embezzlement at Jackson Area FCU
Luxury Home With ‘Purse Room’ Allegedly Bought With Funds from CU Was Featured in Magazine
Husband of CU CEO Charged in Alleged $91M Embezzlement is Placed on Leave by State
NCUA Files $95M Lawsuit Against Former CEO, Husband, Alleging Extensive Theft Via ACH Fraud and More
