Without question, the theft of $1 million in cash allegedly perpetrated by a former Assistant Vice President ("AVP") assigned to Priority One Credit Union's Los Angeles branch during the years of 2010 through 2012, has left many pondering how that amount of money could have been taken without anyone noticing the theft.
In 2014, CUMIS paid a claim in the amount of $880,000 against the $1 million claim filed by the Credit Union. Shortly afterwards, CUMIS filed a criminal report with police authorities, against the AVP who allegedly committed the crime and filed a lawsuit against the Credit Union's accounting and auditing firm, Turner Warner Hwang and Conrad AC ("TWHC") who they allege, failed to identify the thefts during audits conducted of the Los Angeles branch's records during the months prior to February 2013.
In 2014, CUMIS paid a claim in the amount of $880,000 against the $1 million claim filed by the Credit Union. Shortly afterwards, CUMIS filed a criminal report with police authorities, against the AVP who allegedly committed the crime and filed a lawsuit against the Credit Union's accounting and auditing firm, Turner Warner Hwang and Conrad AC ("TWHC") who they allege, failed to identify the thefts during audits conducted of the Los Angeles branch's records during the months prior to February 2013.
To be fair, it was TWHC discovered the theft of more than $60,000 during an audit conducted in late 2009 and early 2010 audit of the Los Angeles branch's records. The firm concluded the theft had been perpetrated by a former receptionist who was later prosecuted but never incarcerated nor ordered to repay the monies she'd stolen. The theft of more than $60,000 should have prompted the Credit Union's Supervisory Committee and Board of Directors to evaluate its internal security procedures and introduce immediate improvements to avoid incidence of future internal thefts.
In late 2012, President Wiggington informed COO, Yvonne Boutte, that she would be temporarily reassigned to the Los Angeles branch to observe the performance of AVP, Pearl Lynette Fortson, and that office's staff. At the time, Ms. Boutte informed employees of the Credit Resolutions and Member Services Departments that there were issues involving Ms. Fortson's management of that branch and numerous complaints by Members, describing that office's staff as "rude" and "lazy."
In late 2012, President Wiggington informed COO, Yvonne Boutte, that she would be temporarily reassigned to the Los Angeles branch to observe the performance of AVP, Pearl Lynette Fortson, and that office's staff. At the time, Ms. Boutte informed employees of the Credit Resolutions and Member Services Departments that there were issues involving Ms. Fortson's management of that branch and numerous complaints by Members, describing that office's staff as "rude" and "lazy."
In January 2013, Mrs. Boutte reported to the Los Angeles branch and soon there after, informed her staff in South Pasadena that Ms. Fortson left on a personal leave of absence because "she didn't want to be there [at the branch] while I'm here."
In February 2013, internal auditor, Diane Huffman arrived at the branch and immediately, notices were posted by Mrs. Boutte on the branch's doors informing visitors that the office was closed due to a "power outage." President Wiggington also ordered that the same notice be posted on the Credit Union's Intranet. At the time, Members contacted the South Pasadena branch and informed employees of the Call Center and Member Services Department that if there was a power outage at the Los Angeles branch, then why were the lights inside the office on and why were employees working at their desks? Because the Los Angeles branch is located within the Los Angeles Postal Distribution Center "LAPDC"], we contacted the LAPDC's administrative and maintenance departments and were told no power outages had been reported for any part of the complex including the space occupied by the Los Angeles branch.
A few weeks later, Mrs. Boutte informed her staff that AVP, Pearl Lynnette Fortson had been fired after Ms. Huffman's audit disclosed that the AVP embezzled money. Mrs. Boutte also threatened termination to any employee of the Los Angeles branch who chose to communicate with Ms. Fortson.
However, the President and Board Chair decided not to report the crime to police in their effort to avoid unwanted publicity of yet another illegal act committed under President Wiggington. And so, the Credit Union filed its claim with CUMIS and decided to avoid any discussion concerning the theft.
CUMIS, however, was not privy to the President and Board Chair's plan. CUMIS paid out $980,000 against the claim filed by the Credit Union. They also filed criminal charges against the former AVP and filed a lawsuit against the Credit Union's accounting and auditing firm, Turner, Warren, Hwang, and Conrad ("TWHC") for allegedly failing to identity the thefts during audits conducted prior to February 2013, of the Los Angeles branch's records. During an interview with the CU Times, TWHC's attorney stated the Credit Union never filed a lawsuit or complaint against his client. Is the attorney naive? Evidently, the basis for CUMIS' lawsuit against TWHC is based on statements made by Priority One's President and some of his staff.
Unquestionably, Priority One's President, its Board of Directors, its Supervisory Committee, it's COO, it's EVP, it's in-house auditor and the entire Accounting Department all failed to notice thefts which took place during the period of late 2010 through 2012. Inarguably, the Credit Union's officers and the Accounting Department each failed to ensure the Credit Union's security protocols were both maintained and deemed effective. Subsequently, one has to wonder why CUMIS thought paying Priority One's claim for $1 million (minus the deductible) was a prudent and sound business decision.
The theft of more than $1 million serves as yet more evidence to the state of buffoonery characterizing the manner President Charles R. Wiggington, Sr. chooses to manage the now small and insignificant Credit Union. For years, President Wiggington boasted about his his above-average intellect and keen prowess as a strategist though the theft of more than $1 million in cash proves that his self-exalting exclamations were nothing more than outlandish bragging by a man whose self-proclamations appear to be nothing more than a transparent ploy to hide his far flung ineptitude. So what can we expect next?
BUT FIRST....
On March 17th, just one day after publishing our last post, Charles R. Wiggington, Sr. became a follower of this blog or any other blog published on blogger.com.
He obviously didn't realize that Google issues notices each time a person with a Google account requests to become a follower of this blog.
He obviously didn't realize that Google issues notices each time a person with a Google account requests to become a follower of this blog.
We of course welcome Mr. Wiggington hoping he'll chime in, providing clarification about the reasons underlying some of his decisions, answering questions and verifying with evidence, some of the subjects we write about. All we ask is he use his real name when posting on this blog.
"Charles Wiggington is now following your blog"
(message sent by Google)
A REASON TO STEAL $1 MILLION
So why did the former AVP allegedly steal $1 million? To attribute the theft to mere greed is too simplistic. What is all too clear is that she never encountered a single obstacle during the 24-months the Credit Union alleges she perpetrated the theft. This is not only phenomenal but serves as another amazing testament to the gross ineptitude of President Charles R. Wiggington, Sr., the Board of Directors and the Supervisory Committee. Were the President, Directors and Supervisor asleep during the 24-months the thefts allegedly took place? Ms. Fortson, unlike Turner Warren Hwang and Conrad AC, has not filed a lawsuit against her former employer, but don't construe this to imply she hasn't been busy. In fact, Ms. Fortson has implemented her own strategies intended to minimize the repercussions she may suffer should she ultimately be indicted and convicted.
According to Los Angeles Superior Court records, in 2014, Ms. Fortson was sued by American Express Bank, FSB Inc. ("American Express") for unpaid debts. Ms. Fortson proceeded to court and lost. This might explain why she allegedly stole more than $1 million in cash from Priority One Credit Union. Here is information regarding the lawsuit filed against Ms. Fortson by American Express.
Case Summary
AMERICAN EXPRESS BANK vs Pearl L Fortson
Case No. YC069680
Parties to the Lawsuit
- Plaintiff: American Express Bank FSB, American Express Centurion BankParties involved in the case were:
- Plaintiff's Attorney: Michael M. Lina
- Defendant: Lynnette Fortson aka Pearl L. Fortson, Pearl Lynnet Fortson aka Pearl Lynnette Fortson
Summation of actions occurring during litigation of the lawsuit:
- Ms. Fortson was served on 3/11/14.
- On 5/05/14, a default judgment was entered by the court against Pearl L. Fortson aka Pearl Lynnett Fortson aka Pearl Lynnette Fortson aka Lynnette Fortson
- On 5/27/14, a dismissal of part of the case against Ms. Fortson
- On 6/30/14, a default judgment was ordered by the court for American Express Bank and Ms. Fortson was ordered to pay the Plaintiff $32,495.95 in damages and an additional $500 in costs.
Ms. Fortson, the former Branch Manager and later AVP, of the Los Angeles branch and now defunct, Airport branch, certainly had a hefty number of aliases. The only other time we've found a similar case is Board Chair, Diedra Harris-Brooks who is aka Diedra Harris, Diedra Brooks, Diedra E. Harris-Brooks, Diedra E. Harris, Diedra E. Brooks, and Diedra Elaine Brooks. Clearly, Ms. Fortson was in debt. However, if she stole $1 million to pay her debts, then she took far more than she actually needed.
Following the filing of CUMIS' lawsuit and criminal charges, Ms. Fortson moved quickly to raise defensive measures. The theft of $1 million constitutes a federal offense punishable by either probation and/or prison time and if the court chooses, an order to pay restitution. Based on the judgment issued against Ms. Fortson in 2014 and for all intents and purposes, she did not have the money to pay the debt due to American Express Bank. This is of course true, if you believe she didn't steal $1 million from Priority One Credit Union. However, it is unlikely that if she stole the money that she would have deposited in a bank or credit union account. She might also have avoided conspicuous splurging on luxuries. Ms. Fortson is probably well aware that her spending will be meticulously dissected by CUMIS' attorney.
We recently obtained the following additional information revealing some of Ms. Fortson's strategizing:
Case Summary
CUMIS INSURANCE SOCIETY
vs
PEARL LYNETTE PORTSON (FORTSON)
Case Number: BC542611
- The Plaintiff is CUMIS Insurance Society, Inc.
- The Plaintiff's attorney is David R. Bence.
- The Defendant is Pearl Lynette Fortson
Ms. Fortson responded to the judgment by filing bankruptcy. Though bankruptcy will not help avoid criminal prosecution, if granted, if could help avoid restitution that might be ordered by the state and would free her from repaying the monies due to American Express Bank.
A hearing is scheduled on August 5, 2015 which will take place in Department 58 at Superior Court in downtown Los Angeles located at 111 N. Hill Street, Los Angeles, California 90012. The purpose of the case is to address Ms. Fortson's bankruptcy filing. The parties involved in the lawsuit are:
In a Declaration Re-Order to Show Cause, filed by CUMIS' attorney on December 11, 2014, Attorney, David R. Bence, informs the court that during a case conference conducted on August 1, 2014, he was informed that Ms. Fortson had filed for bankruptcy protection. At the time, the court scheduled a bankruptcy status conference for October 30, 2014.
On October 30, 2014, the attorney appeared at the status conference during which he informed the court that his client, CUMIS, was going to file an Adversary Complaint whose purpose was to obtain a judgment from the court denying Ms. Fortson's bankruptcy filing and thus enforce a potential future judgment ordering that the former AVP repay whatever monies she may be found guilty of embezzling.
Evidently, CUMIS is exacting its muscle to fight and defeat any effort by Ms. Fortson to avoid any potential restitution that may be ordered by the court.
In the following filing by CUMIS' legal counsel, David R. Bence, the attorney informs the court that he never received notification that a July 30, 2015 bankruptcy status conference had been rescheduled by the court and took place on December 8, 2014.
The following is a copy of the notice issued on January 9, 2015, by the Superior Court of California to CUMIS Insurance informing them that bankruptcy status conference is now scheduled to take place on August 5, 2015.
Each year over the past five years, we've published excerpts from Priority One's 990 IRS filing which have consistently shown that despite his long list of failures, each year, President Wiggington's salary continues to increase. Usually, salary increases are awarded for a job well-done but why would Priority One Credit Union's Board of Directors under leadership of Board Chair, Diedra Harris-Brooks deem his abhorrent and failed performance worthy of an annual increase in salary?
The latest available filing is for 2013 and unlike the filings submitted by the Credit Union in previous years, the 2013 filing omits the salaries of several of the Credit Union's top officers including Executive Vice President, Rodger Smock, COO, Yvonne Boutte, and Vice President of Lending, Patricia Loiacano.
As referenced below, in 2013 Charles R. Wiggington, Sr. was paid $164,484. The amount may not be astounding compared to the salaries paid to CEO's of other companies but it is an immense amount paid to a man whose failures caused the closure of six (6) of the Credit Union's nine (9) branches during the period of 2010 through 2014.
It is also an immense amount when one considers that under his leadership, the Credit Union's Net Income dropped by more than $20 million.
He was also found guilty of sexual harassment in 2008 and due to his violation of state and federal laws the Credit Union was sued by four (4) former employees and one Member. The Credit Union moved quickly to settle each complaint though after issuing payment, the President boasted that the amount of the settlements paid out were inconsequential to the failing Credit Union.
Its also interesting that many in his staff have not received salary increases for more than four (4) years.
HOW DO YOU STEAL $1 MILLION WITHOUT BEING NOTICED?
It is highly possible that the person stealing $1 million from Priority One's Los Angeles branch will be prosecuted and possibly ordered to repay the stolen funds, but a bigger issue plaguing the Credit Union is its failure to protect Credit Union's assets. This is not the first time thefts have occurred and evidently, the thefts have not been sufficient motivation for Priority One's President, Charles R. Wiggington, Sr. and the Board of Directors and Supervisory Committee to develop and implement effective measures that succeed in reducing or all together eliminating internal thievery.
Stealing $1 million occurred during an approximate twenty-four (24) month period. According to the Credit Union, the thefts began at the end of 2010 and probably continued through the end of 2012. An audit conducted in February 2013 by the Credit Union's in-house auditor revealed the theft which was attributed to the AVP who had been assigned to the Los Angeles branch and who was an employee of the Credit Union for approximately 40 years. So has the credit union audited that branch's records for the years prior to 2010? The Los Angels office was also the site of the theft of $60,000 embezzled by a former receptionist. That theft was discovered months after being perpetrated during an audit conducted by Turner, Hwang, Conrad, and Turner, the same firm currently being sued by CUMIS. Years earlier, a large number of Travelers Cheques were stolen from that office. An employee was never found and soon afterwards, the Credit Union ceased selling Travelers Cheques.
The Credit Union's Accounting Department monitors money provided and received from branches. So why didn't the department ever notice discrepancies in the reports provided by the Los Angeles branch? Ultimately, however, it is the overpaid President and the ignorant Board of Directors and evidently, equally inept Supervisory Committee that is responsible for the safety of Credit Union assets. Despite this fact, the President has over the past eight (8) years avoided accountability for his failures, finding protection in his patron, Board Chair, Diedra Harris-Brooks.
What's more, each year, Supervisory Committee Chair, Cornelia Simmons, publishes her address in the Annual Report assuring readers that her committee has once again found that all is safe and well at a credit union bombarded by thefts, losses, and violations of state and federal laws. Is Ms. Simmons' so out-of-touch or so immersed in denial that she can't differentiate between what defines a sound running Credit Union and one subjected to an abhorrent state of management?
The following address signed by Supervisory Committee Chair, Cornelia Simmons, and appeared in the Credit Union's 2013 Annual Report, inappropriately titled, "Maintaining Forward Progress". The statements made by Ms. Simmons were written only four (4) months after an audit revealed the theft of $1 million allegedly stolen by an AVP.
Over the past five years, CUMIS ignored the filing of four (4) lawsuits by former employees and one lawsuit filed by a former Member, opting instead to maintain its relationship with the troubled Credit Union. We know this because CUMIS' representatives called some of the Plaintiffs who filed lawsuits to inquire about why they were suing Priority One Credit Union.
Furthermore, in 2010, CUMIS conducted an investigation of a claim filed by Priority One for monies taken by two married Members who withdrew all the money from their HELOC after the date the loan was scheduled to be closed. The reason the Members succeeded in withdrawing the funds is because the staff in Priority One's Real Estate Department failed to close the loan leaving it open and vulnerable to the dishonest couple. During the investigation, CUMIS' investigator contacted former employees once assigned to the Real Estate Department to ask if the failure to close HELOC's on their scheduled dates was a frequent occurrence. The employee told CUMIS' investigator that the failure to close HELOC's on their scheduled ending date, was not uncommon.
Its also suspicious that following the 2010 disclosure that more than $60,000 had been stolen by the former receptionist of the Los Angeles branch, that President Wiggington, Board Chair, Diedra Harris-Brooks, then AVP, Beatrice Walker, and EVP, Rodger Smock, decided that they would not file a criminal report with police authorities in an effort to avoid adverse publicity to the waning credit union. However, the police were contacted after the incident was first reported in this blog and only after former Board Director, Janice Irving, demanded the former receptionist be prosecuted.
In 2013, Mrs. Harris-Brooks and the President decided not to call the police for fear the theft could result in more adverse publicity and cause Members to lose confidence in the Credit Union's ability to protect their assets. However, what they did not expect was that CUMIS would not only file a complaint with police authority but would initiate legal action against the former AVP and against the Credit Union's accounting firm, Turner Warren Hwang Conrad AC. We can't comprehend why police authorities were not contacted following findings that $1 million ha been stolen. The refusal by the Credit Union to initiate legal action against the AVP has caused us to wonder, what is it that the President and Board Chair are hiding?
Three COO's
Its also suspicious that following the 2010 disclosure that more than $60,000 had been stolen by the former receptionist of the Los Angeles branch, that President Wiggington, Board Chair, Diedra Harris-Brooks, then AVP, Beatrice Walker, and EVP, Rodger Smock, decided that they would not file a criminal report with police authorities in an effort to avoid adverse publicity to the waning credit union. However, the police were contacted after the incident was first reported in this blog and only after former Board Director, Janice Irving, demanded the former receptionist be prosecuted.
In 2013, Mrs. Harris-Brooks and the President decided not to call the police for fear the theft could result in more adverse publicity and cause Members to lose confidence in the Credit Union's ability to protect their assets. However, what they did not expect was that CUMIS would not only file a complaint with police authority but would initiate legal action against the former AVP and against the Credit Union's accounting firm, Turner Warren Hwang Conrad AC. We can't comprehend why police authorities were not contacted following findings that $1 million ha been stolen. The refusal by the Credit Union to initiate legal action against the AVP has caused us to wonder, what is it that the President and Board Chair are hiding?
Three COO's
- During the years (2010-2012) the thefts occurred, Priority One had three Chief Operations Officers in place. The first was Beatrice "Bea" Walker during whose infamous stay the theft of $60,000 embezzled by a former receptionist of the Los Angeles branch was discovered. Based on the Credit Union's own disclosures, the thefts which would ultimately amount to $1 million began in late 2010 while Ms. Walker remained COO. However, Ms. Walker was terminated in July 2011 after her efforts to oust the President failed and after the Board discovered that she had described them as uneducated and unqualified to serve as Directors.
- The second COO was the equally notorious, Cindy Garvin. Ms. Garvin began her employment in August 2011 under much fanfare initiated by Executive Vice President, Rodger Smock, who proclaimed her expertise in real estate and consumer lending, marketing and business development. She was terminated at the end of 2012 for failure to perform her duties and only after the President discovered that she described the President as incompetent and ignorant.
- Currently, the infamous Yvonne Boutte serves as Vice President of Operations. Ms. Boutte has no prior experience as a COO. Her former capacity was overseeing the credit union's collections department. In 2012, she attempted to subjugate a Member into submission and provoked a lawsuit which was quickly settled by the Credit Union for approximately $20,000. It is also Mrs. Boutte who in March 2012, disclosed the reason why the AVP was terminated and revealed that more than $1 million in cash had been stolen from the Los Angeles branch's vault. She not only violated laws governing confidentiality, she also defamed the former AVP.
Source: https://twitter.com/priorityonecu
Priority One Credit Union may not be any Member's Financial Fitness Center and it may not know how to help any Member or employee Win with Money, but its security measures are sufficiently lax and ineffective to allow opportunities for some employees to successfully abscond with Credit Union and Member funds. If the former AVP is indicted, tried and convicted, she could be incarcerated. And if her bankruptcy filing is approved, it could help her avoid having to pay any ordered restitution. However, none of this explains how a single individual could steal more than $1 million in cash without the President, Executive Vice President, the Accounting Department, the Board of Directors or the Supervisory Committee ever noticing.
We've no doubt that the Credit Union's ability (or inability) to protect Credit Union and Member assets will be a subject of debate in the lawsuit filed by CUMIS against Turner Warren Hwang and Conrad AC; and in the lawsuit filed by Turner Warren Hwang Conrad against Priority One Credit Union. And expect the President, the Board Chair and other officers of the Credit Union to scramble and concoct stories which may help them escape accountability for the blunders they alone committed.
What Happened to Priority One Credit Union
How a corrupt President caused Priority One Credit Union's decline
http://www.piorityonecu.blogspot.com
This post first appeared on What Happened To Priority One Credit Union?, please read the originial post: here
