The Toledo Teachers Credit Union - with 26 million dollars in assets and seven thousand members it's the dominant credit union in the Toledo District. And much of its economic power comes from the fast growing Bella Vista branch. But between late last year and this year - the credit union management has had to fire everyone from that branch. Why? Because of fraud and misappropriation - in the range of half a million dollars. It was a field day for fraudsters, and it seems everyone was in on it from the highest to the lowest positions in that branch office.
All was to be revealed to the members on Saturday at the annual general meeting. Courtney Menzies went down for the meeting - that turned out to be not much of a meeting after all. Here's her story:
A special investigation of the Bella Vista branch of the Toledo Teachers' Credit Union found that 8 staffers, including senior personnel, engaged in internal fraud and theft, leading to the direct misappropriation of funds from at least 28 member accounts.
It happened between the early months of 2022 and continued until it was discovered in the last quarter of 2024.
This was supposed to be reported to the 7 thousand members on Saturday at the Annual General Meeting at the TCC Auditorium on Saturday - but, the meeting could not proceed because they could not get the quorum of even 100 members to proceed.
And the bad news that the board had to share with them included the fact that this cluster of crooked employees at the Bella Vista branch had racked up more than half a million dollars through various acts of fraud, most prominently making loans on members' accounts without their knowledge and then disbursing the money - with the member not finding out until when the loans they never knew they took out became delinquent.
The Chairman was curt when we asked him about it:
Gustavo Requena, President, TTCU
"The institution is exploring all legal, which includes civil and criminal, options in this matter."
Courtney Menzies:
"Have they been terminated?"
Gustavo Requena, President, TTCU
"Yes."
Courtney Menzies:
"How much did the credit union lose as a consequence of this fraud?"
Gustavo Requena, President, TTCU
"This is an ongoing investigation and we will be able to provide the details when we are completed with the investigation."
Courtney Menzies:
"Are you pursuing legal action to try and recover the losses?"
Gustavo Requena, President, TTCU
"I alluded to that earlier, I said we are pursuing civil and criminal options."
Courtney Menzies:
"How has it affected so far the credit union's financial position?"
Gustavo Requena, President, TTCU
"It has impacted the institution because now we need to provision more for those bad debts."
But might they also face a fine for running a financial institution basically like a bad panades shop? Requena says the Central Bank hasn't fined them, yet.
Courtney Menzies:
"Has Central Bank imposed any sort of fine?"
Gustavo Requena, President, TTCU
"No."
Courtney Menzies:
"Have there been any internal control measures that have been implemented since then?"
Gustavo Requena, President, TTCU
"Certainly, the board has responded as is required, we strengthened the internal governance within the institution."
And while Requena concedes that controls had to strengthened - he did not agree with the auditor about the internal culture which allowed members to be defrauded and their accounts to be used as basically a piggy bank for bad actors:
Courtney Menzies:
"In the report it stated that the management allowed a "culture of unethical business practices to take root." What oversights or failures would you say led to this?"
Gustavo Requena, President, TTCU
"That is an opinion that was shared. We do not share that opinion. We know that there were areas that were deficient and the institution has certainly strengthened those areas to ensure that there is not a reoccurrence of this situation."
And, the Chairman and his board have to hope that answer is satisfactory enough to satisfy the thousands of members who will likely face the reality of a very bad financial year:
Gustavo Requena, President, TTCU
"We are going to explain to the members what happened and we are sure that our members understand how credit unions work and we will be able to ensure that they will be aware of what happened."
This afternoon, the credit union put out a release saying, quote, "we were unable to meet a quorum due to scheduling conflicts arising from other activities outside of our control. Notably, this was not the first time TTCU was unable to convene an AGM as a result of not meeting quorum." End quote.
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