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CU System
Aranjo embezzlement trial begins
SPRINGFIELD, Mass. (2/8/08)--The former CEO of a community development credit union and her husband went to trial Wednesday on charges of embezzling funds from the credit union to use for personal expense, business ventures and real estate developments. Carol Aranjo, former CEO at D. Edward Wells CU, which was closed down by federal regulators in 2003, is accused along with her husband, Douglas Smith, of embezzling $1.3 million from Springfield, Mass.-based D. Edward Wells (The Republican Feb. 7). The trial in U.S District Court is expected to last up to six weeks. Prosecution witnesses include former credit union board members, account holders, and members of the National Credit Union Administration (NCUA)--which shut down D. Edward Wells. Aranjo and her husband were arrested at their Springfield home in July 2006 (News Now July 10, 2006). They were charged with embezzlement, conspiracy and bank fraud. The charges alleged they used the credit union's money as their own, mismanaged funds, and doled out bogus loans. When the credit union was liquidated in 2003, it had losses of about $3 million. Aranjo, who was a well-known advocate of community development institutions, was a former chair of the National Federation of Community Development Credit Unions. The federation's board voted to remove Aranjo as chair in 1999, and she departed from the federation in 2000, according to federation Executive Director Cliff Rosenthal (News Now July 10, 2006). Rosenthal said Aranjo resisted the federation's attempts to get an accurate and full accounting of investments the federation had made in the credit union. As a result, the federation initiated and pursued a complaint to the NCUA. NCUA conducted an investigation, which culminated in the liquidation of the credit union.


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