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NCUA Receives Nearly $5.4 Million Recovery from BCT Fraud
Friday, August 15, 2014 6:35 AM

The National Credit Union Administration has received a restitution of almost $5.4 million resulting from a fraud prosecution by the U.S. Attorney’s office of the Northern District of New York.

The prosecution followed the 2011 liquidation of BCT Federal Credit Union of Binghamton, New York. Visions Federal Credit Union of Endicott, New York, purchased and assumed BCT’s assets, liabilities and member shares.

“An alert NCUA examiner uncovered this fraud, and diligent work by the U.S. Attorney’s office and NCUA’s Asset Management and Assistance Center made this recovery possible,” NCUA Board Chairman Debbie Matz said. “None of BCT’s former members suffered losses on their insured shares. We’re especially grateful that the Department of Justice was able to obtain this restitution for the National Credit Union Share Insurance Fund.”

While much of what the fraudulently obtained money was spent on can never be recovered, our office seized seven vehicles, three bank accounts, two real estate properties – one home and one vacant piece of land – and cash. It is through these forfeitures that we are able to partially restore the losses to the National Credit Union Administration,” United States Attorney Richard S. Hartunian said. “We have a very astute and aggressive Forfeiture Litigation Unit that works tirelessly on behalf of victims, as in this case.”

The fraud led to the liquidation of the credit union. Laura Conarton and her son, Scott Lonzinski, both of Susquehanna County, Pennsylvania, pleaded guilty in U.S. District Court in August 2012 to bank/financial institution fraud. The two provided false documents to the credit union in order to obtain approximately $14 million in loans, which BCT Federal Credit Union was required to write off. They are serving federal prison sentences. The $5,391,641 recovery followed the seizure of bank accounts and property by the U.S. Attorney’s office and will be returned to the Share Insurance Fund.