BLUEFIELD, W.Va. (1/20/12)--A federal court in West Virginia on Wednesday lifted a stay and reinstated to active status a lawsuit filed in 2009 by the National Credit Union Administration (NCUA) against employees and family members of the now defunct Bluefield, W.Va.-based N&W Poca Division FCU.
The $2.4 million lawsuit alleges the defendants breached their fiduciary duties, and engaged in fraud, conspiracy to commit fraud, and gross negligence that contributed to the credit union's collapse. The agency is also seeking punitive damages to be determined by the court.
The stay had been ordered on Dec. 10, 2010, by Senior Status U.S. District Judge David A. Faber of the Southern District of West Virginia, Bluefield, pending criminal cases brought against credit union employees Rebecca L. Poe, assistant manager, and Pamela M. Mullins, a teller.
The two were convicted in September of embezzling more than $2.4 million from 2003 to August 2008 by using several methods,, including creating fictitious deposits into their account and accounts of family members, making fictitious loan payments; issuing official checks to themselves and family members. No funds were received by the credit union to support these.
Poe was sentenced to 51 months in prison, three years of supervised probation and ordered to pay restitution totaling more than $2.4 million. She also was banned under an NCUA prohibition order against participating in the affairs of any federally insured financial institution (News Now
Sept. 29). Mullins was sentenced in September to 30 months in prison and ordered to pay restitution of $2.4 million.
In addition to Poe and Mullins, the suit names:
- Deborah G. Bailey, manager of the credit union, who is the mother of Poe and aunt of Mullins;
- Kenneth J. Bailey, husband of the manager;
- Joey L. Poe, husband of the assistant manager; and
- Christopher Mullins, son of the teller and a member of the credit union's Supervisory Committee.
NCUA placed the credit union into involuntary liquidation on Oct. 3, 2008, due to its insolvency, said the original lawsuit filed on June 26, 2009.
In lifting the stay, Faber ordered that a status hearing be held to determine schedule for the case.