Friday, July 12, 2019

Former Melrose CU CEO Indicted

Former Melrose Credit Union CEO, Alan Kaufman, along with Long Island businessman, Tony Georgiton, were indicted on July 11 in a bribery scheme.

According to the indictment, Kaufman accepted free housing and financing for the purchase of his personal residence from Georgiton in exchange for the approval of millions of dollars in loans to Georgiton’s companies at favorable terms. Kaufman approved the loans, even though the head of the loan department refused to sign off on the loans.

Kaufman also is alleged to have arranged for Melrose CU to pay $2 million to a company owned by Georgiton for the naming rights to a ballroom in Queens, New York, despite Melrose's marketing director stating that the naming rights deal was only worth $50,000 per year and had minimal value to the credit union.

In addition, Kaufman is charged with accepting lavish vacations, including to Paris and Hawaii, as bribes from a media company, in exchange for Melrose CU purchasing increased advertising with that company.

Kaufman is charged with one count of conspiracy to commit bribery and two counts of bribery of a financial institution officer, while Georgiton is charged with one count of conspiracy to commit bribery and one count of bribery of a financial institution officer.

According to U.S. Attorney Geoffrey S. Berman, both men "face criminal charges for their self-dealing."

Melrose Credit Union specialized in taxi medallion lending and was liquidated on August 31, 2018, becoming the most expensive natural person credit union failure to the National Credit Union Share Insurance Fund.

Read the press release.

Read the indictment.
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