Although Veterans Health Administration Credit Union had $2 million in assets when it was liquidated by state regulators in March, VHACU’s former president/CEO allegedly stole more than $2.3 million from the Detroit-based credit union, Michigan Attorney General Bill Schuette said Friday.
Fuataina Afutiti, 50, of Westland, was arraigned Friday before Magistrate Judge Bari Blake Wood in the 36th District Court in Detroit.
With the funds she allegedly stole from 2012 to this year, she leased or bought several cars, including a 2013 Mercedes Benz, and a motorhome. Afutiti also used the credit union’s money to pay for vacations.
The alleged embezzlement was uncovered by examiners from the Michigan Department of Insurance and Financial Services in February. When Afutiti was questioned by examiners about irregularities and cash shortfalls they found in books, she could not provide a “logical explanation,” according to the state’s attorney’s office.
“For a person to take advantage of Michigan veterans, many of whom are disabled and on fixed incomes, to use the money to live a life of excess is despicable,” Schuette said. “These men and women gave so much to allow us the freedoms we have in this country and anyone who takes advantage of that will face the consequences.”
According to the state audit, the total loss amounted to $2,303,158.
Afutiti (pictured), who is free on a $10,000 bond, was paid $87,000 in 2014, according to the credit union’s 990 document filed with the IRS.
VHACU’s 1,297 members, assets, loans and shares were assumed by the $234 million Public Service Credit Union in Romulus, Mich.
VHACU was the third Michigan credit union to be taken over by state regulators this year.
Last month, regulators placed the financially troubled $24.8 million Valley State Credit Union in Saginaw into conservatorship.
Although the regulator did not specify the credit union’s issues, Valley State has been losing money since 2011, according to NCUA financial performance reports. From 2011 to 2015, the credit union’s net income losses totaled more than $195,000.
However, Valley State suffered heavier net income losses of $229,780 at the end of this year’s first quarter and an additional $301,069 in net income losses at the end of the second quarter, according to NCUA financial performance reports.
In January, state regulators placed the $68 million Clarkston Brandon Community Credit Union into conservatorship after its former CFO, Michael Anthony LaJoice, admitted to embezzling more than $18 million from the Clarkston, Mich.-based cooperative.
The credit union was merged in March into the $3.2 billion Michigan State University Federal Credit Union in East Lansing. LaJoice was charged with bank fraud by federal prosecutors, but his plea hearing has not been scheduled yet.
Also in January, Kathryn Sue Simmerman, the former manager of the $17.2 million Shoreline Federal Credit Union, was sentenced to six and a half years in federal prison after she admitted to embezzling more than $1.9 million from the Norton Shores, Mich.-based cooperative over 17 years.
The $18.2 million Shoreline continues to operate. After posting an ROAA of -4.19% at the end 2015, the credit union has already returned to profitability with an ROAA of 1.08% at the end of 2016’s second quarter, according to NCUA financial performance reports.
