(KNX 1070) -- A long-time manager at CBS Employees Federal Credit Union has been arrested -- accused of embezzling $40 million over 20 years.
Prosecutors say Edward Rostohar spent the money on gambling, expensive cars, watches, and private jet travel.
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
On the day Rostohar was suspended, his wife called 911 and said her husband had stolen money from work and planned to leave the country.
He was taken into custody and prosecutors say he confessed.
Prior to his 30 years of employment at the CBS Employees credit union, Rostohar was an examiner at NCUA, court documents state. Rostohar allegedly told law enforcement that this background gave him knowledge of what NCUA examiners look for when examining credit unions and allowed him to avoid detection, the affidavit states. Rostohar allegedly said he gambled away much of the money and spent the rest on traveling by private jet, buying expensive watches, and giving his wife a weekly allowance of $5,000. He also said he purchased two cars – a Porsche and a Tesla – with money he stole from the credit union, court papers state. Rostohar allegedly also admitted to starting a business in Reno, Nevada in December 2018, and he wrote tens of thousands of dollars' worth of checks to himself to cover the business's cost as well as to pay a $5,000 monthly mortgage on a home in Reno he recently purchased.
If convicted on both charges, Rostohar faces a statutory maximum sentence of 30 years in federal prison and a $1 million fine on the bank fraud count and a mandatory consecutive term of two years in federal prison on the aggravated identity theft count.
The CBS Employees Credit Union has been liquidated by the federal government. Another credit union has assumed its assets, loans, and member shares.
