NORTH PHILADELPHIA (1/28/13)--The former manager of a now defunct credit union in North Philadelphia was sentenced to 7 1/2 years of prison for allegedly embezzling more than $2.3 million from the credit union through schemes such as laundering Internal Revenue Service (IRS) refund checks.
Ignacia "Nacho" Morales, 50, pleaded guilty in September to charges of conspiracy to defraud the government in a case that led to the shuttering of Borinquen FCU (Philadelphia Business Journal Online and Philadelphia Inquirer Jan. 25).
The charges stemmed from activities between 2006 and June 2011 that included laundering more than 1,000 IRS refund checks from a New York fraud ring that filed bogus tax returns. Morales allegedly kept 20% of the refunds.
He also pleaded guilty to misapplication and embezzlement, false reports on federal credit institution entries, engaging in monetary transactions in property derived from specified unlawful activity, filing false federal income tax returns, and attempted possession with intent to distribute more than five kilograms of cocaine.
Morales was also ordered to pay restitution totaling $2.3 million to the National Credit Union Administration, $7.3 million to the IRS and a special assessment of $800, and undergo five years of supervised release.
NCUA closed the credit union in July 2011. At the time, Borinquen served 8,600 members, many of them low-income Hispanics, and had deposits totaling $6 million.