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MetaBank settles with CU over fraud
BERLIN, N.H. (2/15/12)--A notice of settlement was filed Feb. 6 in a U.S. District Court in Concord, N.H., for a class action lawsuit brought by lead plaintiff Guardian Angel CU, Berlin, N.H., and other financial institutions against  Iowa-based MetaBank and Meta Financial Group. The financial institutions sought funds they lost when a MetaBank employee embezzled more than $4 million by selling false certificates of deposit (CDs).

Terms of the settlement were not disclosed. The order filed by U.S. District Judge Paul Barbadoro gave the parties 20 days to file any objections  or motions to intervene, with written responses  due in 30 days. A hearing has been scheduled for March 26 to work out final approval, according to the court document.

Barbadoro in July had refused to dismiss the case, in which Guardian Angel and 34 other depository institutions alleged the bank had breached its contract by negligently allowing an employee to steal about $4 million in 2005 ( Feb. 14). His decision did not allow punitive damages or attorney's fees.

The former MetaBank employee, Charlene Marie Pickhinke of Sac City, Iowa, who was a branch office supervisor, was sentenced in 2009 to seven years in a federal prison after pleading guilty to one count each of wire fraud, making a false statement in a bank's books or records, money laundering and aggravated identity theft.  She had faced a possible sentence of 82 years in prison.

Pickhinke worked for the bank from 1979 to 2007 and allegedly sold the CDs, suing MetaBank's name, via an independent broker. She instructed purchasers to wire the funds into one of several false accounts she created at the bank. About 50 credit unions and banks lost funds when she sold the fake CDs and pocketed the money (Des Moines Register July 11, 2009 and News Now July 14, 2009). 

MetaBank's parent company, Meta Financial Group, is based in Storm Lake, Iowa. MetaBank has 13 branches and $686 million in assets.

Guardian Angel, which has $41 million in assets, lost about $99,000 in April 2005, according to the original complaint. Four credit unions were among the eight groups that sued MetaBank in 2008 and 2009 over the fraudulent transactions.


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