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CU in New Hampshire sues MetaBank over fake CD
BERLIN, N.H. (7/24/08)--A small New Hampshire credit union has filed a lawsuit against Iowa-based MetaBank, alleging the bank was negligent in allowing an employee to walk off with millions of dollars in a phony certificate of deposit (CD) scheme. Guardian Angel CU, a $39 million asset Berlin-based credit union, alleges in the suit that it deposited $99,000 in April 2005 in exchange for a CD from MetaBank. In January 2008, Guardian Angel learned the CD was a fake. Gerald Dumoulin, CEO of the credit union, confirmed that the lawsuit had been filed in the U.S. District Court of New Hampshire in Concord. However, Dumoulin told News Now that because the litigation is in progress he could not comment on the case or facts involved. According to the lawsuit, the $686 million asset MetaBank had investigated phony CDs after an earlier unspecified complaint. The bank was sued in April by two Texas banks, including The Frost National Bank in Texas. The court records and filings with the Securities and Exchange Commission said a former Metabank employee, Charlene M. Pickhinke, had sold fraudulent CDs to several financial institutions and that $4.2 million was still outstanding (New Hampshire Business Review July 15). Guardian's lawsuit identifies Pickhinke as a supervisory employee and part of the bank's management staff. It says the bank was negligent in hiring her in a supervisory position and in failing to take measures to prevent such a theft. The suit asks that the bank pay back the funds with interest to financial institutions who bought about 50 phony CDs. MetaBank in answer to a complaint filed by the Texas bank said it was unaware of and not a participant of the alleged CD sale and that Pickhinke carried out the scam individually and apart from her work authorized by the bank. It has not filed an answer to the credit union complaint, said the Business Review.
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