Gardaí are called in over €700k missing from credit union
Gardaí are probing the suspected disappearance of €700,000 from a credit union. Members have been told to check their balances after the suspected fraud.
A probe by the Central Bank is being carried out at Rush-Lusk Credit Union in north County Dublin, with the figure missing understood to be around €700,000, the Irish Independent has learned.
The board of the credit union has reported the suspected fraud to the gardaí.
Central Bank officials, from its registrar of credit unions office, are poring over the books of the lender.
Accountants from Grant Thornton have also been engaged to probe its finances.
Reserves at Rush Credit Union are understood to have fallen to around 2pc of assets, well below the 10pc figure required by the Central Bank.
A figure of €1.3m has been set aside by the Irish League of Credit Union's rescue fund, the Savings Protection Fund, to put into the reserves of the lender.
Plans had been in train to merge it with its neighbour, Progressive, which is more than four times larger. However, that is now in doubt.
Regulators at the Central Bank have the option of shutting down the credit union, as happened with Berehaven in Co Cork two years ago. Alternatively, they could seek to force its merger with Progressive.
There are 10,000 members of Rush Credit Union and it has assets of €25m.
One source familiar with the situation said: "The guts of €700,000 is missing. Accountants are trying to reconcile it."
Confusion as to how much money the lender holds prompted its board to write to members this week, asking them to fill out a form to confirm their balances.
The letter states: "The board would like to confirm your agreement with the balances shown on your ShareCU cash/loan accounts on April 30, 2016."
Members have been assured that their funds are protected by the state deposit scheme and by the league's Savings Protection Scheme.
And if fraud is confirmed, the league's insurance scheme will cover the losses, sources said.
Asked about the suspected fraud, a spokesman for the League of Credit Unions said: "The credit union has identified an issue. As the matter is currently being investigated, we cannot comment in any great detail, other than to say that the credit union is working extremely hard to ensure that this matter is dealt with swiftly."
The spokesman added that the credit union had written directly to members on the issue.
"We would like to reassure members that no credit union funds will be affected by the incident and that the credit union is fully insured to deal with such matters.
"Operations at Rush Credit Union have not been disrupted and members can do business in the usual way."
The Central Bank, where Anne Marie McKiernan is the credit union registrar, said a financial report was being prepared for the board of Rush-Lusk Credit Union.
"Members should use the credit union in the usual way," the spokesman added.