Bob DePalma and David Ax had more than a million dollars wire transferred last week and it had nothing to do with winning the lottery.
DePalma, the Groveland Township supervisor, and Ax, the township’s treasurer, were following advice from their auditor and protecting taxpayer money by requesting the funds be moved from the Clarkston Brandon Community Credit Union to another financial institution.
‘They had $20 million embezzled,? said DePalma. ‘We had 20 million reasons to get our money out.?
On Jan. 8, the Oakland County Sheriff’s Office announced Michael LaJoice, a 36-year-old Tyrone Township resident and chief financial officer of the Clarkston Brandon Community Credit Union, had been charged with 14 counts of embezzlement at 52-2 District Court.
Two days earlier, LaJoice had walked into the Oakland County Sheriff’s Office headquarters in Pontiac and confessed to embezzling approximately $20 million from the CBCCU over the course of his 12 years employment at the Independence Township branch. The confession came after an audit.
According to a statement dated Jan. 11 and released by CBCCU Chief Executive Officer Donna Bullard, credit union leadership was made aware the week of Jan. 4 of ‘potentially serious accounting irregularities during a routine visit from the Department of Insurance and Financial Services. After Michael LaJoice was confronted about the errors, he failed to show up for work the following day and was immediately terminated as chief financial officer, a position that he held since June 2015.?
LaJoice turned himself in to police on Jan. 6, OCSO detectives confirmed with credit union officials the credibility of his statements and the Oakland County Prosecutor’s Office subsequently authorized the 14-count warrant.
‘We are appalled and dismayed by this news,? said Bullard in the statement. ‘Our first and most important priority is expressing our profound regret to our members and the community that this crime occurred and was not uncovered sooner. During the entirety of LaJoice’s employment, Clarkston Brandon Credit Union has had regular examinations and audits that were conducted in accordance with the Michigan Credit Union Act.?
LaJoice remains in Oakland County Jail on a $1 million bond and the OCSO, along with the FBI and the National Credit Union Administration, are continuing what will be a lengthy investigation.
‘We don’t know if anyone else is involved,? said OCSO Undersheriff Michael McCabe on Wednesday. ‘I’m in my 39th year with the sheriff’s office and I’ve never seen an embezzlement from a financial institution this large. We can’t answer why it’s this large and has gone on for this long. This has been going on for probably 12 years. They are audited on a regular basis.?
The investigation’s intent, Bullard’s statement notes, is to learn the full extent of the crime and how it remained undetected.
‘We are working around the clock in full cooperation with authorities to see that every detail of this egregious situation is revealed and justice is served,? said Bullard. ‘We remain focused on continuing to provide the quality of services our members are accustomed to. There has been no change in hours or services. Membership accounts are insured by the NCUA to $250,000, and all of our members can rest assured that their assets are secure.?
While DePalma and Ax removed the bulk of funds Groveland Township had secured at CBCCU– mostly tax payments collected for the month of December that were to be distributed Jan. 15 to the proper government entities, the township is still keeping about $40,000 in accounts at the credit union.
‘They are nice people to deal with,? said Ax. ‘No one expects one of their top people to be skimming money and to skim the quantity reported is still mind-boggling. But in talking to both Donna and Lisa– they are good at giving us our money. We plan to continue using them as long as their credit score stays high in light of this. The money totals will be within what is the insured limit of $250,000.?
Groveland Township, which like most municipalities uses several different financial institutions to hold money, began using CBCCU in June 2015. Township officials choose financial institutions that have received a three-star or better rating on a scale of five stars from Bauer Financial. CBCCU had a four-star rating prior to the embezzlement. As of Thursday, Jan. 14, they had a two-star rating from Bauer.
Brandon Township and the Village of Ortonville also have accounts with Clarkston Brandon Community Credit Union, which has a second branch located in Ortonville.
Both Brandon Township Treasurer Terri Darnall and Village Treasurer Beth Forys said they had no plans to stop doing business with CBCCU, particularly since the amounts kept with the financial institution are insured.
‘We’re way under the $250,000 allotted amount,? said Darnall. ‘We have no plans to change it at this time… This embezzlement is very unfortunate, they are lacking in internal controls, which is a concern. At this point, we know our accounts held there are safe. We may do some reevaluation after learning how this happened.?
Forys said the village has about $22,000 in a money market fund with CBCCU.
‘We use them because we like to do local,? she said. ‘I’m not worried, I feel safe with it there. I guess I just don’t know how it could have gone on for so long, that much money, and without anyone having a clue.?
LaJoice is required to have a GPS tether if he is released on bond. His pre-exam conference is scheduled for Jan. 20 and a preliminary exam for Jan. 26, both in front of 52-2 District Court Judge Joseph Fabrizio.