Deal gives missing money back to Bull's Eye credit union in Wisconsin Rapids

MADISON -- Bull's Eye Credit Union will get back nearly $85,000 of the $540,000 authorities say was embezzled by the former president of Rapids Municipal Credit Union.

The award is part of an agreement filed in federal court among the deceased president's former spouse, Bull's Eye and the U.S. government.
Bull's Eye, which acquired the credit union in December 2008 after authorities discovered what they believed to be David K. Henke's embezzlement, had sought an $84,686 Primevest investment account that was held by Henke's former spouse, Laurie, until the government seized it last year. Laurie Henke filed for divorce in January 2009.
Henke was indicted by a federal grand jury with bank fraud and embezzlement. In November, Henke was scheduled for a plea hearing in U.S. District Court in Madison but was found dead of a possible suicide after he failed to make the court appearance.
The government seized the investment account, claiming it was subject to forfeiture as it was directly traceable to Henke's fraud. Laurie Henke also filed claim to it, stating in court documents that she was awarded the account in her divorce from Henke and had rights to it as an innocent spouse.
Bull's Eye claimed that as a successor of Rapids Municipal Credit Union, it was entitled to the return of the money because it not only lost $540,000 to embezzlement but spent $166,000 to investigate Henke's banking activities.
Although the recovery suit had been set for trial in February, the proceeding was postponed and the parties on Monday reached an agreement, which remains pending before District Judge William Conley.
In the agreement, Laurie Henke gave up her claim to the account in exchange for the government agreeing not to seek her 950 shares of Coloma Meats Inc. or any other investment, retirement or bank account, held in either Henke's name, or their heirs or assignees.
U.S. Attorney Elizabeth Altman said Wednesday that although Laurie Henke had nothing to do with the fraud allegations against her ex-husband, she isn't entitled to keep stolen money. In agreeing not to seek any other assets of Henke's, Altman said, "we seized what we thought we legally could at the time of the indictment
Bull's Eye has already received $497,246 from its insurer, according to a FBI agent's affidavit filed with the court.

The affidavit also outlined how Henke was believed to have taken the credit union's money:
Before Henke was dismissed as Rapids Municipal Credit Union president, state banking auditors concluded the credit union had "at the very least some serious record-keeping problems." Bull's Eye acquired the credit union and hired private auditors, who initially determined that $323,000 had been embezzled.
The FBI and Wood County Sheriff's Department Investigator-Sgt. Dean F. Berres began investigating Henke in February 2009.
Henke told them he embezzled the money by writing some Rapids Municipal Credit Union checks to his accounts at Wood Trust Bank and other banks, and also took credit union funds and invested them.
David Stark, Bull's Eye's president, told the FBI that Henke also embezzled by adding credit union funds to 22 loan balances that he converted to his own use.
Stark said Wednesday that he hopes the judge will approve the pending agreement, as it and the insurance settlement have "made all member-victims whole."