ALEXANDRIA, Va. (2/4/10)--The National Credit Union Administration (NCUA) has filed suit against Wells Fargo Investment Advisors seeking the repayment of $10 million in insurance-fund losses related to the now-deceased Edwin Rachleff's theft of funds from New London Security FCU. The NCUA sought the recovery of $12 million in losses from his estate in early 2008. Rachleff, a former employee of A.G. Edwards, which is now owned by Wells Fargo, created fraudulent account statements, according to the NCUA. The current suit, which was filed on Jan. 29 in the U.S. District Court for the District of Connecticut, makes many of the same claims, alleging that Rachleff’s fraud against the credit union began in 1998 and continued into 2008. Rachleff, allegedly stole $7.5 million from one of his clients, and also managed investments for New London. However, it was later found that the investment vehicle that Rachleff managed for the credit union did not exist, and the resulting loss of funds caused the credit union to fail. New London Security FCU was closed in July 2008 with the NCUA serving as the liquidating agent, and, at that time, assuming coverage of all losses associated with the credit union failure through its National Credit Union Share insurance Fund. According to the complaint, A.G. Edwards, and, later, Wells Fargo failed to notify the credit union that the investment accounts maintained by Rachleff did not exist. The NCUA has also accused Wells Fargo of neglecting to properly supervise Rachleff and of ignoring the possibility that this lack of supervision could result in fraud. The NCUA has requested a jury trial.