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Tuesday, June 1, 2010

Achieving a New Low, Part 2


“I have been in meetings with 
senior management 
and they know what they’re doing.” 

Robert West, Training and Education Manager
Priority One Credit Union, April 13, 2010 

Robert West's opinions about the efforts allegedly made by Priority One Credit Union's executive sector, to improve business or create a more cohesive working environment are not something anyone should ever believe in- at least not without evidence. On this blog, the veracity of Mr. West's statements mean absolutely nothing without evidence. 

Of course, management does in fact know what it's doing, then we'd have to assume that the loss of more than $13 million of Net Income since January 1, 2007, the date that Charles R. Wiggington, Sr. began his appointment as President, is intentional. And is the credit union's growing delinquencies and increasing account closures more evidence that senior management allegedly knows what its doing? Does Mr. West hope people will ignore the fact that Priority One ended 2009 with more than $5 million in losses? 

We've also recently also confirmed that the amount of $230,238.99, reported as profit earned during the month of January was actually not profit at all, but the transfer of monies from one ledger into another to create the impression that profits had been generated when none had actually occurred. Odd that both the President and COO made great efforts in January and February to emphasize that this was profit obtained from increased business when it was nothing more than "cooking the books", something the President has increasingly done since former CFO, Manny Gaitmaitan resigned. Is this an example of what Mr. West's insistence that senior management knows what they're doing? 

The evidence proves that Charles R.  Wiggington, Sr. is the worst President to lead the credit union since its founding in 1926. And though he uncleverly altered the credit union's real reported finances in the January 2010 report, his deception has been exposed.  

The company's inability to obtain new business at a level required to offset its overhead was attested to in the decline in new business for the months of February, March, April, and May 2010.  Despite the credit union's well-documented failures, the President and COO have continued to vocalize claims that business is good. 

As we also pointed out in recent posts, January is one of the slowest months of the years yet if one were to believe the President and COO, business actually increased after an unprecedented decline during all of 2009. 

Though the credit union is currently immersed in yet another campaign to salvage its public tattered image, we've decided to focus on the credit union's current financials. As you read through this month's post, you'll realize that the credit union's financial problems have not improved. Simply stated, the problem is President Wiggington; Board Chair, Diedra Harris-Brooks; and now, COO, Beatrice Walker. Not only are they struggling to contend with the credit union's business problems, the struggle of power between the President and COO has actually grown. 


Despite the President's insistence that Priority One is experiencing a resurgence, he has remained amazingly tight-lipped about developing legal problems. Here are four situations the credit union is currently contending with:


As report in our last post, Priority One refused to release funds to one of its members, actually, elderly members.

The member has recently filed a complaint with the state's Department of Financial Institutions ("DFI") and acquired legal representation. Is this again an example of how Priority One Credit Union helps members "win with money"


We've learned from employees of the Burbank branch that former Branch Manager, Linda Nisely, has hired an attorney and has filed a lawsuit. The President and COO have denied all knowledge of any lawsuit being filed and Mrs. Nisely has informed an FSR at Burbank that she will neither deny or confirm the filing of a complaint against her former employer. If a lawsuit has not been filed, then Mrs. Nisely's response is more than a little peculiar. 

Rumors of the alleged lawsuit arose within a week after COO, Beatrice Walker, disclosed that she is actively seeking a Branch Manager for the Burbank office. But wasn't Mrs. Nisely laid-off because the credit union is reducing expenditures? Coincidentally or not, shortly after rumors surfaced that Mrs. Nisely filed a lawsuit, Ms. Walker disclosed she was going to temporarily postpone her search for a Branch Manager. Ms. Walker also stated that she will resume her search in 6 to 8 months. 


Several months ago, we began reporting about a theft at the Los Angeles branch in the amount of more than $60,000. The monies were siphoned out of member accounts over a period of several months by a former receptionist who left the credit union on maternity leave and never returned. Initially, the President had said the credit union would not seek prosecution of the employee even though embezzlement is a federal offense. Our expose' about the crime, forced the credit union to file a police report. Evidence presented by the District Attorney to a Grand Jury determined there was sufficient evidence to seek prosecution of the former receptionist.  


We've recently spoken to the former employee who was seuxally harassed by the President over a period of several years and have been informed that her complaint remains under investigation by the Department of Fair Employment and Housing.


This year's annual meeting took place on May 26 ,2010, at 6 p.m. and as usual, in the Loan Department of the South Pasadena branch.

The meeting began with Training and Education Manager, Robert West, conducting the invocation. During the thirty (30) minutes which followed, Board Chair, Diedra Harris-Brooks, and President, Charles R. Wiggington, Sr. spoke briefly about the credit union's reemergence into the Black.  If one were to believe them and we of course, don't, then the financial nightmare created by President Wiggington is a thing of the past.  

Invited to the meeting was external Auditor, Terry L. Nabors from Turner, Warren, Hwang and Conrad, who provided the results of this year's election. Amongst the information disclosed by Mr. Nabors was the fact that incumbent, Janice Irving, received the highest number of votes, followed by incumbent Directors, Bobby Thomas and Thomas Gathers. Nominee, Gilbert Atwood, came in fourth. 

Though the President and Board Chair, Diedra Harris-Brooks, along with COO, Beatrice Walker, and Credit Resolutions Director, Yvonne Boutte, carried out a campaign which included ordering that employees of the South Pasadena not vote for Mrs. Irving, their efforts failed on a miserable level. We attribute their plot's failure to the fact that a number of South Pasadena employees decided to counter their efforts by campaigning for Mrs. Irving. 

We find it odd that in the midst of continuing cut-backs, the credit union chose to again spend money by hiring Mr. Nabors to speak at the meeting when the election's disclosures could have been made by Mrs. Harris-Brooks. 

Mrs. Harris-Brooks also said that business increased over the past "three months", attributing the alleged success to the credit union's refusal to enter into sub-prime lending which has caused so many other credit union's to suffer financially. Did Mrs. Harris-Brooks forget that Priority One ended 2009 with more than $5 million in losses

Mrs. Harris-Brooks also thanked Real Estate and Consumer Department Loan Manager and Call Center Supervisor, Joseph Garcia, for his contributions which she said have "made a real change to the credit union."

Mr. Garcia is an enigma in Priority One's long history. He became chummy with COO, Beatrice Walker while he served as Branch Manager of the Redlands branch. At the end of 2009, she told him she wanted him working in South Pasadena where he would help her re-shape the credit union. It was an odd choice since he had no prior experience in strategic planning. However, Ms. Walker who has proven to be as dishonest as the President, told Mr. Garcia that he would be brought over in the capacity of interim Call Center Supervisor while the credit union continued to search for a full-time supervisor. In this way, he could prove himself and be given the position.

Within 2 weeks following his arrival in South Pasadena, Mr. Garcia was given the position of Call Center Supervisor. Within 4 months, Ms. Walker added the titles of Real Estate Department and Consumer Loan Department Manager, though his previous experience in loan processing was limited to consumer loan processing. He had absolutely no experience with reviewing, processing or approving real estate loan applications. Ms. Walker's reasons for promoting him to oversee real estate loan funding was purely political.

She also added the title of Credit Manager though again, he had no prior experience as a Credit Manager. 

Mrs. Harris-Brooks also told attendees that Mr. Garcia has made tremendous strides in rectifying employee morale issues which have taken a toll on the working environment. Is Mrs. Harris-Brooks daft? Mr. Garcia is a polarizing influence. Like the President, he is prone to hissy fits and exhibiting preferential treatment to employees he likes. He is divisive. Couple this with the fact that he and Human Resources "clerk", Esmeralda Sandoval, have chosen to willing serve as witnesses for the President, providing fraudulent testimonies used to slander and terminate staff members. If this is what Mrs. Harris-Brooks views as changes that are improving employee morale, then she is more than a little confused and has no comprehension of what things are harmful to the working environment. 

Mrs. Harris-Brooks also thanked temporary CFO, Saeid Raad, whose efforts she sad, are helping "Priority One move forward." If Ms. Walker is alluding to the fact that Mr. Raad is pliable and is willing to alter financial reporting as instructed to by the President and COO, then yes, he is helping the credit union "move forward" on paper. In reality, Priority One's performance continues to falter. By the way, we know that Mr. Raad is extremely well-paid and possibly, overpaid. President Wiggington recently stated, "His checks are bigger than mine!" Of course they are. Altering financials always comes at a heavy cost, doesn't it? 

Mrs. Harris-Brooks concluded by stating "In my opinion, we have the right team in place." Wasn't it Mrs. Harris-Brooks "opinion" back in 2008 that determined that based on what she understood, the President sexualized comments, i.e., "I'm going to whip you ass", "Come here so I can whip that ass", etc. did not not constitute sexual harassment as defined under federal law. 


Always more telling than Mrs. Harris-Brooks distorted personal opinions about Mr. Garcia and Mr. Raad are the reports contained in the credit union's annual reports which are always distributed during the annual meeting. 

The 2009 Annual Report is titled "Reaching New Heights TOGETHER." The title implies heights have previously bee reached when the 2008 and 2009 Monthly Income Statements clearly disclose tremendous monthly losses. We've selected to publish the reports signed, though not composed by, President Wiggington; Board Chair, Diedra Harris-Brooks; and Treasurer, Joe Marchica. We are also publishing an address written by Training and Education Manager, Robert West. 

Detracting for just one moment, this year's report is a vast aesthetic improvements of those published in 2008 and 2009. The report doesn't appear frugal and it is nicely designed. 


In what is a complete departure from past reports, the opening message is authored by the now infamous, Robert West. The Education and Training Manager writes about what differentiates Priority One from other credit unions. Here is Mr. West's address: 

“While all credit union, everywhere around the world have received direction and inspiration from the high ideals embodied in this simple statement [“People Helping People”], Priority One Credit Union has decided to make a bold move with regard to it: a move we believe will help you to better understand how we are different from other credit unions, as well as banks.

The bold move does not involve department from the spirit of the “people helping people” message. It involves our attempt to redefine it, and as a result, reinvent ourselves and improve our value position with you – our loyal membership.”

Recently, we revised our mission statement and tag line to more clearly define what we are in the business of “helping people” to do, and communicate to the world how we want our members to think about us.”

Mission: To help our member-owners and employees achieved financial fitness. We are committed to offering quality products and services that help you win with money.

Tag line: Priority One Credit Union – Your Financial Fitness Center

By making these changes, it is our intent to tell you in a way that maybe we haven’t before, that we are passionately committed to your total financial well-being, and to transforming the credit union into a place where you will feel uniquely connected and celebrated.

Therefore, whether you need to buy a car or a home; or get out of debt or avoid bankruptcy; understand and improve your credit report,, or plan for your financial future, we have the resources and information to help you take control of your finances and reach your goals.”

The address is pure hyperbole. Clearly, Mr. West's goals was to create an impression of the high standards at the heart of the credit union's carefully structured efforts to ensure relationships are raised and maintained with the valued membership. Its of course, all untrue. 

Mr. West describes those efforts as "bold" but all we can see is that they've amended their Mission Statement which amount to nothing more than the same old Wiggington-styled lip service. 

The excessively embellished address is devoid of any reference to actual evidence serving to prove any of Mr. West's exaggerated claims. We invite him to substantiate whatever he meant by making members feel "connected" or "celebrated." 

Are the addition of increased charges and fees and a disdain for ethics and covering up illegal acts how the credit union celebrates members and for that matter, employees? Mr. West's address is laden with empty, meaningless verbiage that is designed to project an image of a caring and professional organization, something that is completely untrue. Mr. West tries hard to sell readers a bill of goods but its clear that in doing so, he is either completely out-of-touch, ignorant, or trying to present a fraudulent image of the troubled credit union.  Furthermore, increasing member complaints citing poor service indicate that members feel neither "connected" or "celebrated" by the aberrant credit union. 

Report of 
Board Chairperson

 The Board Chairperson's and President's report was superficial, non-committal and full of assurances and is carefully structured to allude to any of the credit union's deep-seeded financial problems that caused Priority One to end 2009 deeply immersed in the negative. Here is there report:

“We are committed to financial fitness not only for your credit union but also for you, as individual members. Last year we promised to help members weather the “great recession.” Loan modifications and workouts along with adding a free financial education and counseling service (Balance, Inc), exemplify our committed to your financial fitness.

In spite of the financial crisis that engulfed our industry, we are already in the early stages of a turnaround. In the past three months, several key indicators are improving with net income increasing, delinquencies down, and consumer loan growth resuming, in addition to our capital gradually trending upward.”

Here is the first problem we see with their address. There is no way Priority One Credit has proven to be a "financial fitness center" and certainly, the last 16 months have proven that this is an organization quite incapable of escaping the financial trap it's been thrust into by the President and the Board Chair. And whether or not they "promised to help members weather the "great recession" the fact is, Priority One did not weather the "great recession". What's more, it as a credit union, does not possess the ability to help members  "win with money". How can Priority One claim to be anyone's financial fitness center. 


Joseph Marchica's report provides erroneous data. The Director begins by stating:

“Assets, once a downtrend, have leveled off around $165 million.”

Whether as a result of ignorance or intentionally trying to dupe readers, Mr. Marchica's statement is more than misleading, its completely erroneous. The credit union's actual asset size is $155 million, not $165 million. Mr. Marchica has failed either by error or by intention, to deduct the remaining outstanding $10 million unpaid balance due on the $20 million loan borrowed by President Wiggington in mid-2008. 

On January 1, 2007, the date Charles R. Wiggington, Sr. began his appointment as President, the credit union's Net Income approximated $172 million. And though Mr. Marchica attempts to understate the amount of losses, the credit union has lost more than $17 million during the years Charles R. Wiggington, Sr. has served as President. 

Mr. Marchica continues, stating, "Loan charge-offs remain a challenge but are expected to moderate over time.Didn't the Board Chairperson and President state in their report that "delinquencies are down"? Why didn't Mr. Marchica reiterate this in his report? What is the amount of actual delinquencies that the Board Chair and the President conveniently omitted from their report? 

We'd also like to know on what Mr. Marchica bases his prognostication that delinquencies are "expected to moderate over time."  

Mr. Marchica concludes:

“Management has a renewed commitment to make operations efficiencies a top priority, as the credit union moves toward lowering operating costs over the next few months. We have begun the year with emphasis on financial prudence and practice of sound business decisions.”

Are the President's failed $600,000 telephone system, the more than $70,000 failing call center, and superfluous remodeling of the South Pasadena and Burbank branches examples of management's renewed commitment to make operation efficiencies a top priority? We just can't fathom how $48,000 in carpeting or the COO's new $5000 laptop are going to make anything more efficient. 

Sorry Mr. Marchica, but we're going to challenge your statement that Priority One is just now beginning to exercise "financial prudence and practice of sound business decisions." Because there is no evidence of this, we ask that you please provide anything tangible that could lend some credence to your statement.  

As we've recently revealed, the President is immersed in playing antics intended to dupe members. 2009 ended with more than $5 million in losses yet miraculously, the credit union reported profits of $230,238.99 during the month of January 2010. How is that even possible? It's not. The President and Board Chair transferred money from one of the credit union's general ledgers and reported it as profit where no profit ever occurred. 

Furthermore, both the Board Chair and President lied again, when they wrote, "We are in the early stages of a turnaround. In the past three months, several key indicators are improving with net income increasing." So what Mrs. Harris-Brooks and President Wiggington hope members will believe is that the credit union is finally generated profit even though the profit reported by the credit union for the month of January was actually money transferred from one general ledger and reported as profit. Is that correct? 

The fact is, profit in the amount of $230,238.99 was not generated in January 2010. In February, profits earned amounted to $71,5190.68. In March 2010, profits amounted to $8254.66. 

But in April 2010, the re-entered the RED though Mrs. Harris-Brooks, Mr. Wiggington, and Mr. Marchica made no reference to this during the Annual Meeting. In fact, their strategy was to circumvent the credit union's record of losses and continue their insistence that the credit union has rebounded.

Net Capital did rise and is now above 7%, but the President appears to be focusing on this fact as evidence of that Priority One is again, prospering. We would like the Chairperson to explain how the continued decline in Net Income during the months of February, march and April can be construed as a sign that business is improving. 


The following financial information is provided by the credit union. Please note the many inconsistences.

Summary Statement of Financial Condition: 
(3/31/10, Unaudited)

  Treasurer's Report 
 $165 million

Monthly Income Statement
April 2010

Asset Size
$175 million

 On its Career page located on it's website, the credit union provides the following statement:

"Priority One Credit Union, A progressive $175 M credit union, is an equal opportunity employer. We offer competitive salary and benefits packages within a friendly team-oriented environment. We provide career growth opportunities for those that demonstrate the potential and have accepted the challenge of responsibility."

The discrepancies in the figures provided by the credit union range from $1 million to $9 million. With such immense discrepancies, can you trust Priority One? 

All of the figures provided by the credit union conveniently avoid deducting the unpaid remaining $10 million balance due on the $20 million loan borrowed by the President in mid-2008. 


The following figures appearing in the 2009 Annual Report and located under Summary Statement of Income and Expense, caught our attention.

  • One is the "audited amount of loss" for the year ending March 31, 2009. According to the report, the amount of losses incurred through the end of March 2009 was -$5,241,847.

  • The second figure is the reported unaudited amount of Net Income (Loss) "as of 3/31/2010." The amount reported by the credit union is -$527,992

Is the credit union stating that more than $500,000 were lost during the first three-months of 2010? If so, then how can Board Chair, Diedra Harris-Brooks, declare that business is improving? What's more, Mrs. Harris-Brooks and the President have avoided providing specifics supporting any of their assertions that business is improving, reducing the 2009 Annual Report to a useless piece of documentation. There are so many inconsistencies between what the Board Chair, the President and the Board Chair wrote with the credit union's financials that one can't rely at all on any of the information being touted around by the credit union's dishonest officers. 


The following information was obtained from the credit union's 2009 Annual Report, its Monthly Income Statements and the quarterly reports filed with the NCUA. 





















*Deduct $10 million for the remaining unpaid balance due on the loan borrowed in 2008 by President Wiggington













(Year-to-date total $8527.00)

(Year-to-date total $15,930.25)

(Year-to-date total $21,619.27)



(Year-to-date total $17,380.40)

 (Year-to-date total $34,788.53)

(Year-to-date total $66,125.03)



(Year-to-date total -$311,784.12)

(Year-to-date total -$329,596.12)

(Year-to-date total -$184,962.12)

(Interest paid on $10 Million Borrowed in Mid-2008)


(Year-to-date total $62,879.40)

(Year-to-date total $95,917.75)

$31,972.60 (Year-to-date total $127,890.35)



(Year-to-date total $301,749.67)

(Year-to-date total $310,004.33)


(Year-to-date total $224,401.89)

Evidently, the credit union has found itself back in the negative though neither the Board Chair, President or Board Treasurer ever allude to this in their very deceitful reports published in the 2009 Annual Report. What is clear is that the three officers chose to lie and paint a picture of forthcoming growth when there is no evidence to indicate a possible financial resurgence. 

In the end, one has to ask, was Training and Education Manager, Robert West, delirious when he declared that the management sector knows what it's doing or did he, like the Board Chair, President and Treasurer, try to dupe anyone reading his vacuous and superfluous address? 

“All deception in the course of life is indeed nothing else but a lie reduced to practice, and falsehood passing from words into things.”

-Robert Southey-

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