Gardai probe €400k 'fraud' uncovered at credit union
Published 16/06/2014 | 02:30
GARDAI are investigating a suspected fraud at a credit union involving up to €400,000.
The "unauthorised transactions" at Larkhill and District Credit Union in Whitehall, Dublin, have also been reported to the Central Bank, the Irish Independent has learned.
The credit union has had to refund thousands of euro to members, while consultants Grant Thornton have been appointed to work out the extent of the alleged fraud.
Money was taken from members' accounts without their knowledge and children's accounts were also tampered with. Loan repayments were also not debited from borrowings.
It is understood the report to gardai in the Ballymun district centres on an employee who worked at the local lender. It is understood up to €400,000 was involved, but most of the money has since been refunded.
However, some members spoken to by this newspaper are in dispute with the credit union, maintaining that some records of repayments they made on loans have disappeared.
One woman said her husband had borrowed €15,000 off his brother to pay off on a loan, as the level of their debts was proving too much for them. But the credit union and its advisers Grant Thornton are disputing the loan repayment, claiming there is no written record of it.
It is understood that a group made up of around 15 people met the board of credit union in the past few days to complain about the handling of the refunds process, and claimed some money due to them has not been repaid.
A statement from the board of the credit union confirmed that "Grant Thornton has been engaged to carry out a review of unauthorised transactions on a small number of accounts".
"The Board of Larkhill & District Credit Union Limited wishes to state that all necessary and appropriate notifications have been made to the Central Bank, An Garda Siochana, Irish League of Credit Unions and insurers in this matter.
"In addition, the credit union continues to work in full co-operation with these parties."
The board spokesman said it has an insurance policy in place that has enabled it to pay out where funds have gone missing. Member savings are also protected by the State's deposit protection scheme, which covers amounts up to €100,000 per account.
"The board of directors of Larkhill & District Credit Union would like to take this opportunity to assure the members that their savings are safe, secure and are not affected by the matters in respect of which Grant Thornton have been retained," the statement added.
Credit union sources maintain that the members have been kept fully informed about the missing-money scandal, but this has been questioned by some members spoken to by this newspaper. Larkhill has around 8,000 members and its a medium-sized credit union, with around €28m in assets.
The annual general meeting of the credit union has been put off until Grant Thornton finishes its forensic audit of the accounts. Sources within the credit union movement insist that fraud is rare, although they stressed that all financial organisations are prone to it from time to time.