FRESNO, Calif. – CUMIS Insurance Society filed suit in federal court here yesterday to recover $182,800 it claims a branch manager at Educational Employees CU stole through 56 unsecured loans she approved to family and friends, though she appears to have siphoned most of the proceeds for herself.
The civil suit, filed in U.S. District Court for the Eastern District of California, claims Elizabeth Gonzalez, who managed the credit union’s Merced branch from 2005 to 2010, disregarded credit risks and failed to document the loans or verify borrowers’ income in violation of the credit union’s procedures. On at least six occasions, Gonzalez forged a member’s signature on loan documents and share withdrawals, according to the suit.
Gonzalez convinced borrowers to lend her funds she approved for loans and convinced them she would repay the loans, the suit alleges. “For many of the loans, Gonzalez took advances and received cash disbursements from members’ existing loans without the knowledge of the borrowers,” claims CUMIS in the suit.
CUMIS, a unit of CUNA Mutual Group, paid the credit union the $182,800 loss, minus a $10,000 deductible and is trying to recover the payment from Gonzalez.