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Wednesday, August 8, 2012

Bank chief stole $2.3M, brought down Philly credit union


A former bank manager from Philadelphia was charged today in embezzling more than $2.3 million from a credit union that he used to try to buy 15 kilograms of cocaine and real estate, federal authorities said.

Ignacio "Nacho" Morales, 40, was manager of the Borinquen Federal Credit Union, which served low-income Hispanics in North Philadelphia. In June 2011, the National Credit Union Association took over BFCU, but within two weeks, closed the credit union and liquidated its assets.

The sudden shuttering of the financial institution puzzled and upset community leaders who, at the time, were not told what had happened.

The court documents explained why.

According to U.S. Attorney Zane David Memeger, Morales looted $600,000 in 2008 to buy real estate and allegedly stole $560,000 in 2009 in an attempt to purchase 33 pounds of cocaine.

Part of Morales' alleged scheme involved cashing fake IRS tax return checks. Morales kept 20 percent of the value of each phony check, according to an court records. In addition, he allowed one credit union member to withdrawal $500,000 from an account even though there was nothing in it; took $700,000 that another member attempted to deposit for his personal use, and altered bank records and delivered fake statements to cover up his actions.

Morales is charged with conspiracy to defraud the government with respect to claims, misapplication and embezzlement, making false reports on federal credit institution entries, engaging in monetary transaction in property derived from specified unlawful activity, filing false federal income tax returns, and attempted possession with intent to distribute more than five kilograms of cocaine.

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