Judge Sentences Former Bank Manager to 90 Months for Scheme That Closed Local Federal Credit Union
|U.S. Attorney’s Office January 25, 2013|
PHILADELPHIA—Ignacio Morales, a/k/a “Nacho,” 49, of Philadelphia, was sentenced today to 90 months in prison for 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 percent of each check for himself as commission. Morales pleaded guilty September 4, 2012.
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 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.
In addition to the prison term, U.S. District Court Judge R. Barclay Surrick ordered restitution to the National Credit Union Administration $2.3 million, restitution to the IRS of $7,311,747.50, five years of 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.