A CBS Employees Federal Credit Union manager is in custody and charged with embezzling $40 million from his employer over two decades. Federal prosecutors said Edward Martin Rostohar spent the money on gambling, cars, watches, and travel by private jet.
The National Credit Union Administration, the federal agency that regulates credit unions, announced Friday that it has liquidated CBS Employees Federal Credit Union and discontinued its operations after determining it was insolvent with no prospect of restoring viable operations on its own. Member services continue and deposits remain protected by insurance, the NCUA said in a statement.
University Credit Union, located in Westwood, immediately assumed CBS Employees’ assets, loans and member shares.
“The new University Credit Union members should experience no interruption in services,” the NCUA statement said.
Rostohar, 62, of Studio City, was charged with felony counts of bank fraud and aggravated identity theft. He was arrested on March 12 and ordered detained as a flight risk and an economic danger to the community. His arraignment is scheduled for April 18.
According to an affidavit, from before 2000 until this month, Rostohar used his position to make online payments from the credit union to himself or by forging the signature of another credit union employee on checks payable to Rostohar.
Prosecutors said he was caught March 6 when a credit union employee found a $35,000 check made payable to Rostohar with no reason for the amount. The employee audited credit union checks since January 2018 and discovered $3,775,000 in checks to Rostohar, with the forged signature of another employee who had not given consent, prosecutors said.
On March 12, the credit union told Rostohar he had been suspended from his job after an internal investigation uncovered “irregularities in the performance of your job duties,” according to prosecutors. On the same day, Rostohar’s wife called 911 and said her husband had stolen money from work and was fleeing the country, authorities said.
Rostohar was taken into custody and admitted that he stole money from the credit union for 20 years, prosecutors said. They said Rostohar estimated he stole $40 million. An NCUA examination up to Feb. 28 revealed a potential loss of $40,541,130.
If convicted on both charges, Rostohar faces a statutory maximum sentence of 30 years in federal prison, 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, prosecutors said.