Former CFO at State Employees in N.Y. files whistleblower suit
The former chief financial officer at State Employees Federal Credit Union in Albany, N.Y., has filed a whistleblower lawsuit against the institution.
The lawsuit’s plaintiff, David Gosstola, served as CFO at the $4 billion-asset credit union for over 11 years. The lawsuit claims that he was fired “in bad faith” in May after Gosstola filed a whistleblower complaint against the credit union’s CEO, Michael Castellana, according to the complaint. Gosstola’s allegations against SEFCU include breach of contract, wrongful termination and fraud.
“The reasons for termination of plaintiff’s employment were to punish plaintiff and to remove plaintiff as an impediment to Mr. Castellana's management and direction of SEFCU,” the lawsuit alleges.
SEFCU said that the lawsuit "makes unfounded allegations" about its practices, according to a statement from the credit union. The institution disclosed Gosstola's claims to the National Credit Union Administration when he brought them last year, according to the statement.
Over the duration of Gosstola's employment, events led him to believe that Castellana's governance “constituted a serious threat to the safety and soundness of SEFCU and to the interests of its members.”
For example, the complaint alleges that Castellana shared confidential information surrounding commercial loans to third parties that Castellana had personal relationships with.
In a letter from January 2018, Gosstola detailed his concerns with belief that he would be protected under the credit union’s internal whistleblower policy. The policy states that "employees may not retaliate against an employee filing a complaint under this policy with the intent or effect of adversely affecting the terms or conditions of employment ... ."
But after Gosstola submitted his letter, Castellana failed to respond to Gosstola. Instead, the lawsuit alleges, the credit union's supervisory committee retained an accounting firm to review Gosstola’s statement.
The credit union then sought outside legal counsel from Barclay Damon to prepare a rebuttal report. The complaint claims that Barclay Damon did not interview Gosstola before issuing its report.
The reviews by the law firm and accounting firm found no wrongdoing, according to the credit union's statement.
Gosstola was summoned to appear at Barclay Damon's Albany office in May. He was informed that he was fired from the credit union and that he was not permitted to return to the premises. The complaint also claims that Gosstola was removed from payroll and did not receive customary separation or severance compensation.
“Termination of plaintiff's employment was in bad faith, contrary to the SEFCU whistleblower policy, in willful breach of plaintiff's guaranteed protection from retaliation, and contrary to the interests of SEFCU members,” the complaint said.
Gosstola's lawsuit is seeking compensatory, punitive damages and attorneys' fees.