OMAHA, Neb.– In September of 2024, one analyst raised questions about how $66.9-million Creighton Federal Credit Union could lose more than $12 million in a 12-month period.
Now, according to a new report, an NCUA audit of Creighton FCU reveals statement fraud spanning decades that resulted in the loss of millions of dollars.
Last September industry analyst Chip Filson raised questions about the merger between Creighton FCU and $1.2-billion Cobalt FCU, based in Papillion, Neb.
In August 2024, Creighton FCU merged with Cobalt after declaring itself insolvent.
In the twelve months ending June 2024, the net worth of Creighton FCU fell dramatically, from a positive $6.3 million to a negative $7.3 million. A total loss of $13.6 million, which was recorded in the June 2024 quarter’s Call Report, Filson reported on his blog.
Filson, on his blog, also noted: "For a sudden financial loss this large that is not connected to asset write-offs, all of the indicators point to an internal defalcation. In the 5300 Call Report numbers NCUA posted at March ’24, Creighton’s shares total $61 million. Just 90 days later that total is $74 million. The difference is almost equal to the the total loss of $13.6 million. Of this sudden share increase, $12 million is in regular shares."
Filson previously served as NCUA’s Director of the Office of Programs (CLF, NCUSIF, and Examination Policy) and later helped to start Callahan & Associates and remains active in various credit union issues.
More Questions Raised
Account statements led some banking watchdogs, who spoke with news station First Alert 6, to “begin raising questions around the fact that Creighton FCU, a $67-million institution, managed to suddenly lose 18% of its value in the span of just 90 days last spring,” First Alert 6 said.
First Alert 6 reported it obtained a letter in which NCUA shined a light on Creighton FCU’s sudden, huge loss. The news outlet noted that an audit was requested by U.S. Rep. Mike Flood (R-Neb.) and performed by NCUA.
First Alert 6 reported that according to NCUA Inspector General James Hagen, the loss of $12.2 million was accumulated over more than two decades as a result of statement fraud conducted by the institution’s former CFO, and that the NCUA had no knowledge of the fraud until after the CFO died in April 2024.
First Alert 6 stated, according to NCUA, the CFO understated Creighton FCU’s ATM expenses to “artificially boost Creighton’s income statement over 26 years, which resulted in the more than $12 million loss.”
First Alert 6 said the missing money wasn’t used for personal gain, according to NCUA.
“An audit of the CFO’s entire family uncovered no evidence that the money had ever been transferred improperly or illegally. The Inspector General believes the CFO perpetrated fraud with the goal of making Creighton FCU appear as if it were a thriving financial institution,” First Alert 6 said.