The former manager of CBS Employees Federal Credit Union in Studio City, California, has been sentenced to 169 months in prison for a 20-year embezzlement that cost the credit union $40m (£32m) and led it into insolvency.
Edward Martin Rostohar pleaded guilty to one count of bank fraud. He used his position as a manager at the credit union to make online payments to himself. He also forged the signature of another employee to write cheques to himself.
Prior to his three decades of employment at CBS Employees Federal Credit Union, Mr Rostohar was a trained accountant and an examiner at the National Credit Union Administration (NCUA), a federal agency that regulates credit unions.
During his two decades of embezzlement, he used his senior position to falsify records to hide his fraud and make the organisation appear to be profitable – despite it suffering millions in losses as a direct result of his actions.
His crime was exposed when a credit union employee discovered a $35,000 (£28,000) cheque payable to Rostohar – and conducted an audit that uncovered approximately $3.8m (£3m) in cheques made payable to him between January 2018 and March 2019.
Rostohar said that he gambled away much of the money and spent the rest on travelling by private jet, buying expensive watches, and giving his wife a weekly allowance of $5,000 (£4,000).
He also started a coffee business in Reno, Nevada in December 2018, and he wrote tens of thousands of dollars’ worth of cheques to himself to cover the business’s costs, as well as to pay a monthly mortgage on a home in Reno.
“Rostohar has the moral culpability of someone who was willing to leave as many as 43 depositors with deep losses so that he could wear $100,000 watches, buy a new vehicle every couple of years, and impress women less than half his age with trips on private jets to international vacation resorts, Tiffany jewellery, and gambling parties,” said the prosecution’s sentencing memorandum.
University Credit Union of Westwood, California, has since assumed CBS Employees’ assets, loans, and all member shares.