Former IN credit union worker agrees to prohibition following $1.5 million in ‘misapplied’ funds

VA bank agrees with Fed to pay $8,500 for flood insurance violations; 2017 action with KS Peoples Bank terminated

A former Indiana credit union worker has consented to his prohibition from working at credit unions or any other federally insured financial institution after he allegedly “misapplied” and removed $1.5 million from the credit union.

The National Credit Union Administration (NCUA) said Paul Aimone, a former employee of Midwest Carpenters & Millwrights in Hobart, Ind., consented to the prohibition. According to the complaint filed by the NCUA, Aimone allegedly removed funds of about $1.5 million without the credit union’s authorization or knowledge.

“While an employee of the Credit Union, Respondent, with knowledge and intent, misused nonmember funds to credit unrelated loan payments on delinquent loans, make VISA credit card payments for members, and/or paid operational expenses for the Credit Union, without authorization of the owner of the funds; deleted and destroyed account records from the Credit Union’s database; and falsely reported the financial condition of the Credit Union intending to manipulate the Credit Union’s regulatory net worth ratio,” NCUA stated in its complaint.

The agency said Aimone was presented with the consent order because he allegedly “breached his fiduciary duties and engaged in unsafe or unsound practices; which conduct either prejudiced or could have prejudiced the interests of the Credit Union’s members; and the conduct demonstrates Respondent’s personal dishonesty and unfitness to participate in the conduct or affairs of the credit union.”

Meanwhile, also Tuesday, the Federal Reserve said a Virginia bank has agreed to a $8,500 civil money penalty (CMP) for violations of flood insurance coverage. The Fed said Benchmark Community Bank of Kenbridge, Va., had agreed to the penalty.

Also Tuesday, the Fed said its consent order against Peoples Bank of Lawrence, Kansas, has been terminated. The order was issued in November 2017 for deceptive residential mortgage origination practices.

According to the 2017 complaint by the Fed, Peoples had told certain borrowers that they were paying an additional amount for discount points that would lower the borrowers’ interest rate. “In fact, many borrowers did not receive a reduced rate,” the Fed said. The 2017 order required Peoples Bank to pay approximately $2.8 million into an account to provide restitution to those borrowers. 

NCUA Issues Prohibition Order

Federal Reserve Board issues enforcement action with Benchmark Community Bank and announces the termination of enforcement action with Peoples Bank