Former Bank Manager Pleads guilty in scheme that closed local federal credit union
PHILADELPHIA - Ignacio Morales, a/k/a “Nacho,” 49, of Philadelphia, pleaded guilty today to conspiracy to defraud the government in a case that led to the closure of the Borinquen Federal Credit Union (BFCU). Morales used his position as the bank’s Manager to misuse and embezzle more than $2.3 million of BFCU funds through a variety of schemes, and between 2006 and June 2011, Morales further enriched himself by cashing hundreds of fraudulent U.S. tax refund checks through BFCU, keeping 20% of each check for himself as commission.
BFCU was a federal credit union in Philadelphia. Between 2008 and 2009, Morales embezzled $600,000 from BFCU to purchase real estate, and during the period of September through December 2009, he allegedly took $560,000 from BFCU to attempt to purchase 15 kilograms of cocaine. In September 2008, he failed to deposit $700,000 into an account of a BFCU member, and instead used the money for his own purposes. Morales also allowed a member of the BFCU board of directors to withdraw money from a BFCU account despite the absence of funds in the account resulting in a deficit of approximately $500,000. Morales then intentionally altered bank records and other reports provided to the National Credit Union Administration and their auditors in order to conceal his misuse of BFCU funds. In June 2011, the National Credit Union Administration took over the operation of the BFCU but closed the credit union within a month and liquidated its assets.
In addition to the conspiracy to defraud the government with respect to claims, Morales pleaded guilty to misapplication and embezzlement, 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.
Sentencing is scheduled for December 7, 2012. Morales faces a mandatory minimum sentence of 10 years in prison, restitution to the National Credit Union Administration, restitution to the IRS, a mandatory minimum of five years supervised release, and a special assessment of $800.
This case was investigated by the United States Postal Inspection Service, the Internal Revenue Service, and the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney Arlene D. Fisk.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525