False loans created at credit union in €400,000 fraud probe
Published 17/06/2014 | 02:30
HUNDREDS of false loans were created on accounts of members of the Dublin credit union that is being investigated by gardai over fraud allegations.
Gardai are following a "definite line of inquiry" in their probe into a suspected fraud at Larkhill Credit Union in Whitehall involving up to €400,000.
Savings accounts of members had money taken from them in unauthorised withdrawals. Now it has emerged that loans were created on some members' accounts without their knowledge.
One man spoken to by the Irish Independent had four unauthorised loans created on his account for a total of €32,000 over a number of years.
The loans were taken out in his name without his knowledge. One was for €12,000. He only realised there were false loans in his name when he heard the credit union had a fraud problem and he double check his account. He said there was also money taken from a number of his family's six savings accounts.
In other cases, money paid off loan amounts was never recorded on member statements leading to conflict with the credit union.
A small number of children's accounts had money taken from them without the knowledge of the young account holders.
And credit union sources have now contradicted early claims they made that money had been refunded to members.
The "unauthorised transactions" at Larkhill and District Credit Union emerged last year, but the suspected fraud was only revealed this week by the Irish Independent.
Some €400,000 is understood to be involved. The transactions at the centre of the gardai probe go back to 2002.
Consultants Grant Thornton have been appointed to work out the extent of the alleged fraud. But it has now emerged that it could be months before refunds are paid.
The board of the credit union, which is overseeing the Grant Thornton fraud investigation, has decided that no refunds will be provided until the accountancy probe is complete.
Regulators at the Central Bank are receiving regular updates on the matter.
A number of members met the board of the credit union last week, complaining about the handling of what is being called "rebalancing of accounts" by the Grant Thornton experts.
The members feel the process is taking too long, and there are a number of disputes about loan repayments, with the credit union claiming there is no written record of loans being repaid.
A garda spokesperson confirmed officers in Santry are investigating financial irregularities at a financial institution that occurred from 2002 to 2013.
Sources indicate that the credit union became aware of the irregularities on foot of complaints from members. The incident was then reported to gardai and the Central Bank.
The lender has around 8,000 members and €28m in assets and says that there is an investigation into "a small number of affected accounts".
Members' savings are secure, said the Irish League of Credit Unions.
A statement from board said: "Members that have been affected by this issue have been contacted by the credit union and a process of refunds is ongoing.