Tuesday 6 December 2016

Cash scandal credit union employee won a car in 'rigged draw'

* Safe used to store cash unrecorded in accounts
* Rigged car raffle fears result in car refunds
* Deeds to foreign-based properties found in office

Published 01/11/2016 | 02:30

Rush Credit Union where financial irregularities were unearthed. Photo: Mark Condren
Rush Credit Union where financial irregularities were unearthed. Photo: Mark Condren

A senior employee of a north County Dublin credit union at the centre of a cash scandal won a car in a suspected rigged draw.

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Rush Credit Union has been embroiled in controversy since the summer when gardaí were called in to probe the suspected disappearance of €700,000.

During the course of the probe, concerns were flagged over the annual draw, which has been run for a number of years.

Fears that it was rigged meant that €400,000 had to be refunded, with everyone who entered the draw entitled to have their money put back into their account.

The money was refunded for the draws between 2009 and 2014.

It is understood that a staff member won the car in at least one draw, but detail of what car was won or in what year were not clear.

It has now emerged that the amount of money suspected to have gone missing at the credit union is twice what originally thought, and the financial accounts are in such poor shape that it could cost up to €5.5m to stabilise it.

"It will cost millions of euro to sort this out. It is a basket case, the worst credit union in the country at the moment," one person familiar with the probe said.

None of the money owned by the credit union's 10,000 members is at risk.

However, Independent.ie has learned that investigators from the Central Bank and the forensic accountants from Grant Thornton it appointed have discovered a litany of financial flaws including the 'rigged draw'.

The probe has found:

  • The credit union safe was used to store hundreds of thousands of euro in cash, which was not recorded in the lender's accounts. The suspicion is this cash was being hidden from Revenue. Because they were attempting to evade tax, the owners have been slow to claim it.
  • Deeds to foreign-based properties were found in the credit union safe. It is not known if they were held as security against loans, or were bought by someone associated with the credit unions with money that has gone missing.
  • The total amount of money missing could be up to €1.5m.
  • There are a large number of unverifiable accounts. The ownership of these cannot be established, as there is little detail attached to them. This is one of the reasons there are fears the amount of money needed to shore up the accounts could spiral to at least €5.5m.

One source said the liabilities could end up being unquantifiable, leading to fears it will need an open-ended guarantee to survive, even if taken over by another credit union.

This is because the balances in a number of accounts can't be established, and its two properties have had to have their values written down sharply.

Last night, the Central Bank insisted that there was no risk to the €25m in members' savings at the credit union, which has a branch office in Lusk.

"The Central Bank is engaged with Rush Credit Union in relation to ongoing supervisory issues," it said.

"Any actions taken by the Central Bank are taken in the interests of credit union members and their savings.

"Members' savings are covered by the statutory Deposit Guarantee Scheme up to €100,000 per member."

Last month, the Central Bank obtained a High Court order extending the suspension of credit union manager, Anne Butterly, from holding a management position in a financial services firm.

Acting chairman Gerry Foley has resigned citing personal circumstances.

"The board and management of the credit union are working through the Grant Thornton recommendations and have dealt with the affected members," a spokeswoman for the Irish League of Credit Unions said.

"The credit union is fully insured and is dealing with its insurance company in relation to this matter."

No-one has been charged in relation to the irregularities at the credit union.

Irish Independent

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