The manager of a credit union for CBS employees pleaded guilty in Los Angeles federal court on Monday to a $40 million embezzlement scheme.
Edward Rostohar, 62, was arrested in March after the scheme began to unravel. According to prosecutors, he admitted to stealing money from the bank for the last 20 years.
Rostohar is set to be sentenced on Sept. 16. Prosecutors are expected to seek up to 15 years in prison, thanks largely to the magnitude of the losses. In the plea agreement, he agreed to forfeit various bank accounts and personal property, including watches, jewelry, a Tesla and a Porsche, as well as precious coins and bars seized from the Porsche.
Authorities believe that Rostohar gambled away much of the proceeds of the fraud. He is also accused of spending some of it on private jet flights, and to start a business in Reno, Nev.
Federal officials shut down the CBS Employees’ Federal Credit Union following the discovery of the fraud, and transferred the assets and liabilities to the University Credit Union. The credit union served about 2,800 members, whose deposits were insured up to $250,000.
Credit unions are subject to inspection by the National Credit Union Administration. Prior to working for the CBS Employees’ Federal Credit Union, Rostohar had been an auditor at the NCUA, and knew what auditors would look for and how to avoid detection, prosecutors said.
Rostohar would cut checks to himself or associates, and alter the credit union’s ledgers to conceal the thefts, according to a criminal complaint. The scheme snowballed as Rostohar tried to cover the losses.
The scheme began to fall apart on March 6, when Chery Sicka, the assistant manager, stumbled on a $35,000 check made out to Rostohar. Sicka then discovered several other checks to Rostohar totaling $3.775 million, all of which were co-signed by another credit union employee. The employee stated that she had never signed the checks. Rostohar was confronted with the information on March 12, and suspended. He was escorted out of the building.
Later that day, Rostohar’s wife called 911 and said her husband had stolen money from work and was possibly trying to flee the country, according to a search warrant affidavit. Rostohar was arrested and admitted to forging the bank employee’s signature and to stealing $40 million.