In ‘rare use’ of administrative charges, regulator seeks $4.5 million from former CEO of NY-based CU

Restitution of at least $3.5 million, and a $1 million penalty, is being sought from a former chief executive and board member of a New York-based credit union by the federal credit union regulator, the agency said Tuesday.

Melrose Credit Union on Queens Blvd.

In a press release, the National Credit Union Administration (NCUA) said it is seeking a prohibition order against Alan S. Kaufman, former CEO, treasurer and board member of Melrose Credit union in Queens. The agency said it has filed administrative charges – which it called “infrequently used authority” – seeking the prohibition, the restitution and civil money penalty (CMP).

The agency said that its seven-count notice of charges alleges that Kaufman breached his fiduciary duties the credit union by “placing his own interests above those of the credit union, that he engaged in unsafe or unsound practices, and that he violated applicable laws and regulations.”

NCUA’s notice further alleges Kaufman benefitted from his actions and that he caused “severe financial loss” to Melrose, the agency said.

NCUA Files Notice of Charges Against Former Melrose CEO