CBS Employees Federal Credit Union Permanently Closed After Manager is Charged With Embezzling $40 Million

NEW YORK, NY – AUGUST 02: The CBS headquarters seen on August 2, 2013 in New York City. Time Warner Cable dropped CBS in three major markets- New York, Los Angeles and Dallas – today, after negotiations fell through. (Photo by Andrew Burton/Getty Images)

The longtime manager the CBS Employees Federal Credit Union has been arrested and charged with embezzling more than $40 million from his employer over the past 20 years. Edward Rostohar faces felony counts of bank fraud and aggravated identity theft.

In conjunction with the arrest, the National Credit Union Administration — a federal agency that regulates credit unions — announced Friday that it has liquidated the CBS Employees Federal Credit Union and shut down its operations. University Credit Union immediately assumed CBS Employees’ assets.

Rostohar, 62, of Studio City, was arrested two weeks ago and remains in custody because he is considered a flight risk and an economic threat to the community, according to Nic Hanna, U.S. Attorney for the Central District of California, who announced the charges today. If convicted on both counts, Rostohar faces a maximum of 32 years in federal prison and a $1 million fine.

An arraignment is set for April 18.

According to an affidavit filed with the criminal complaint, beginning before 2000 and continuing until this month, Rostohar used his position as a manager at the federally insured  credit union to make online payments to himself or forged the signature of another employee on checks to himself. The feds allege that Rostohar spent the money on gambling, expensive cars and watches and travel by private jet.

The case is being investigated by the FBI and the Los Angeles Police Department. Here are the details laid out in the indictment, per Hanna:

The alleged scheme was exposed beginning on March 6 when a credit union employee found a $35,000 check made payable to Rostohar, and the check did not include the reason for the high dollar amount, according to court documents. The employee conducted an audit of the credit union checks issued since January 2018 and discovered $3,775,000 in checks made payable to Rostohar and which contained the forged signature of another employee without the employee’s knowledge or consent. On March 12, the credit union informed Rostohar that he had been suspended from his job after an internal investigation uncovered “irregularities in the performance of your job duties,” according to court documents. Later that day, Rostohar’s wife called 911 and told the dispatcher that her husband had stolen money from work and was leaving the country, court papers state. Rostohar was taken into custody and admitted that he stole money from the credit union for 20 years, beginning by paying the monthly balances on his personal credit cards with funds from the credit union’s online accounts or by forging checks, and later by forging his coworker’s signature on credit union checks and depositing them into his personal accounts, court papers state. Rostohar allegedly estimated he stole $40 million from the credit union. An NCUA examination up to February 28 revealed a potential loss to the credit union of $40,541,130.

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SOURCE: DEADLINE, by Erik Pedersen