HOW DOES ONE STEAL $1 MILLION?

Without question, the theft of $1 million in cash allegedly perpetrated by a former Assistant Vice President ("AVP") assigned to Priority One Credit Union's Los Angeles branch during the years of 2010 through 2012, has left many pondering how that amount of money could have been taken without anyone noticing the theft. 

In 2014, CUMIS paid a claim in the amount of $880,000 against the $1 million claim filed by the Credit Union. Shortly afterwards, CUMIS filed a criminal report with police authorities, against the AVP who allegedly committed the crime and filed a lawsuit against the Credit Union's accounting and auditing firm, Turner Warner Hwang and Conrad AC ("TWHC") who they allege, failed to identify the thefts during audits conducted of the Los Angeles branch's records during the months prior to February 2013. 

To be fair, it was TWHC discovered the theft of more than $60,000 during an audit conducted in late 2009 and early 2010 audit of the Los Angeles branch's records. The firm concluded the theft had been perpetrated by a former receptionist who was later prosecuted but never incarcerated nor ordered to repay the monies she'd stolen. The theft of more than $60,000 should have prompted the Credit Union's Supervisory Committee and Board of Directors to evaluate its internal security procedures and introduce immediate improvements to avoid incidence of future internal thefts. 

In late 2012, President Wiggington informed COO, Yvonne Boutte, that she would be temporarily reassigned to the Los Angeles branch to observe the performance of AVP, Pearl Lynette Fortson, and that office's staff. At the time, Ms. Boutte informed employees of the Credit Resolutions and Member Services Departments that there were issues involving Ms. Fortson's management of that branch and numerous complaints by Members, describing that office's staff as "rude" and "lazy." 

In January 2013, Mrs. Boutte reported to the Los Angeles branch and soon there after, informed her staff in South Pasadena that Ms. Fortson left on a personal leave of absence because "she didn't want to be there [at the branch] while I'm here." 

In February 2013, internal auditor, Diane Huffman arrived at the branch and immediately, notices were posted by Mrs. Boutte on the branch's doors informing visitors that the office was closed due to a "power outage." President Wiggington also ordered that the same notice be posted on the Credit Union's Intranet. At the time, Members contacted the South Pasadena branch and informed employees of the Call Center and Member Services Department that if there was a power outage at the Los Angeles branch, then why were the lights inside the office on and why were employees working at their desks? Because the Los Angeles branch is located within the Los Angeles Postal Distribution Center "LAPDC"], we contacted the LAPDC's administrative and maintenance departments and were told no power outages had been reported for any part of the complex including the space occupied by the Los Angeles branch. 

A few weeks later, Mrs. Boutte informed her staff that AVP, Pearl Lynnette Fortson had been fired after Ms. Huffman's audit disclosed that the AVP embezzled money. Mrs. Boutte also threatened termination to any employee of the Los Angeles branch who chose to communicate with Ms. Fortson. 

However, the President and Board Chair decided not to report the crime to police in their effort to avoid unwanted publicity of yet another illegal act committed under President Wiggington. And so, the Credit Union filed its claim with CUMIS and decided to avoid any discussion concerning the theft. 

CUMIS, however, was not privy to the President and Board Chair's plan. CUMIS paid out $980,000 against the claim filed by the Credit Union. They also filed criminal charges against the former AVP and filed a lawsuit against the Credit Union's accounting and auditing firm, Turner, Warren, Hwang, and Conrad ("TWHC") for allegedly failing to identity the thefts during audits conducted prior to February 2013, of the Los Angeles branch's records. During an interview with the CU Times, TWHC's attorney stated the Credit Union never filed a lawsuit or complaint against his client. Is the attorney naive? Evidently, the basis for CUMIS' lawsuit against TWHC is based on statements made by Priority One's President and some of his staff. 

Unquestionably, Priority One's President, its Board of Directors, its Supervisory Committee, it's COO, it's EVP, it's in-house auditor and the entire Accounting Department all failed to notice thefts which took place during the period of late 2010 through 2012. Inarguably, the Credit Union's officers and the Accounting Department each failed to ensure the Credit Union's security protocols were both maintained and deemed effective. Subsequently, one has to wonder why CUMIS thought paying Priority One's claim for $1 million (minus the deductible) was a prudent and sound business decision. 

The theft of more than $1 million serves as yet more evidence to the state of buffoonery characterizing the manner President Charles R. Wiggington, Sr. chooses to manage the now small and insignificant Credit Union. For years, President Wiggington boasted about his his above-average intellect and keen prowess as a strategist though the theft of more than $1 million in cash proves that his self-exalting exclamations were nothing more than outlandish bragging by a man whose self-proclamations appear to be nothing more than a transparent ploy to hide his far flung ineptitude. So what can we expect next? 

BUT FIRST....

On March 17th, just one day after publishing our last post, Charles R. Wiggington, Sr. became a follower of this blog or any other blog published on blogger.com. 

He obviously didn't realize that Google issues notices each time a person with a Google account requests to become a follower of this blog. 

We of course welcome Mr. Wiggington hoping he'll chime in, providing clarification about the reasons underlying some of his decisions, answering questions and verifying with evidence, some of the subjects we write about. All we ask is he use his real name when posting on this blog. 

"Charles Wiggington is now following your blog"

(message sent by Google)

A REASON TO STEAL $1 MILLION

So why did the former AVP allegedly steal $1 million? To attribute the theft to mere greed is too simplistic. What is all too clear is that she never encountered a single obstacle during the 24-months the Credit Union alleges she perpetrated the theft. This is not only phenomenal but serves as another amazing testament to the gross ineptitude of President Charles R. Wiggington, Sr., the Board of Directors and the Supervisory Committee. Were the President, Directors and Supervisor asleep during the 24-months the thefts allegedly took place?  Ms. Fortson, unlike Turner Warren Hwang and Conrad AC, has not filed a lawsuit against her former employer, but don't construe this to imply she hasn't been busy. In fact, Ms. Fortson has implemented her own strategies intended to minimize the repercussions she may suffer should she ultimately be indicted and convicted.

According to Los Angeles Superior Court records, in 2014, Ms. Fortson was sued by American Express Bank, FSB Inc. ("American Express") for unpaid debts. Ms. Fortson proceeded to court and lost. This might explain why she allegedly stole more than $1 million in cash from Priority One Credit Union. Here is information regarding the lawsuit filed against Ms. Fortson by American Express. 

Case Summary

AMERICAN EXPRESS BANK vs Pearl L Fortson

Case No. YC069680

Parties to the Lawsuit

• Plaintiff: American Express Bank FSB, American Express Centurion BankParties involved in the case were:
• Plaintiff's Attorney: Michael M. Lina
• Defendant: Lynnette Fortson aka Pearl L. Fortson, Pearl Lynnet Fortson aka Pearl Lynnette Fortson

Summation of actions occurring during litigation of the lawsuit:

• Ms. Fortson was served on 3/11/14.
• On 5/05/14, a default judgment was entered by the court against Pearl L. Fortson aka Pearl Lynnett Fortson aka Pearl Lynnette Fortson aka Lynnette Fortson
• On 5/27/14, a dismissal of part of the case against Ms. Fortson
• On 6/30/14, a default judgment was ordered by the court for American Express Bank and Ms. Fortson was ordered to pay the Plaintiff $32,495.95 in damages and an additional $500 in costs.

Ms. Fortson, the former Branch Manager and later AVP, of the Los Angeles branch and now defunct, Airport branch, certainly had a hefty number of aliases. The only other time we've found a similar case is Board Chair, Diedra Harris-Brooks who is aka Diedra Harris, Diedra Brooks, Diedra E. Harris-Brooks, Diedra E. Harris, Diedra E. Brooks, and Diedra Elaine Brooks. Clearly, Ms. Fortson was in debt. However, if she stole $1 million to pay her debts, then she took far more than she actually needed. 

Following the filing of CUMIS' lawsuit and criminal charges, Ms. Fortson moved quickly to raise defensive measures. The theft of $1 million constitutes a federal offense punishable by either probation and/or prison time and if the court chooses, an order to pay restitution. Based on the judgment issued against Ms. Fortson in 2014 and for all intents and purposes, she did not have the money to pay the debt due to American Express Bank. This is of course true, if you believe she didn't steal $1 million from Priority One Credit Union. However, it is unlikely that if she stole the money that she would have deposited in a bank or credit union account. She might also have avoided conspicuous splurging on luxuries. Ms. Fortson is probably well aware that her spending will be meticulously dissected by CUMIS' attorney. 

We recently obtained the following additional information revealing some of Ms. Fortson's strategizing:

Case Summary

CUMIS INSURANCE SOCIETY

vs 

PEARL LYNETTE PORTSON (FORTSON)

Case Number: BC542611

• The Plaintiff is CUMIS Insurance Society, Inc.
• The Plaintiff's attorney is David R. Bence. 
• The Defendant is Pearl Lynette Fortson

Ms. Fortson responded to the judgment by filing bankruptcy. Though bankruptcy will not help avoid criminal prosecution, if granted, if could help avoid restitution that might be ordered by the state and would free her from repaying the monies due to American Express Bank. 

A hearing is scheduled on August 5, 2015 which will  take place in Department 58 at Superior Court in downtown Los Angeles located at 111 N. Hill Street, Los Angeles, California 90012. The purpose of the case is to address Ms. Fortson's bankruptcy filing. The parties involved in the lawsuit are:

In a Declaration Re-Order to Show Cause, filed by CUMIS' attorney on December 11, 2014, Attorney, David R. Bence, informs the court that during a case conference conducted on August 1, 2014, he was informed that Ms. Fortson had filed for bankruptcy protection. At the time, the court scheduled a bankruptcy status conference for October 30, 2014.

On October 30, 2014, the attorney appeared at the status conference during which he informed the court that his client, CUMIS, was going to file an Adversary Complaint whose purpose was to obtain a judgment from the court denying Ms. Fortson's bankruptcy filing and thus enforce a potential future judgment ordering that the former AVP repay whatever monies she may be found guilty of embezzling. 

Evidently, CUMIS is exacting its muscle to fight and defeat any effort by Ms. Fortson to avoid any potential restitution that may be ordered by the court.  

In the following filing by CUMIS' legal counsel, David R. Bence, the attorney informs the court that he never received notification that a July 30, 2015 bankruptcy status conference had been rescheduled by the court and took place on December 8, 2014.  

The following is a copy of the notice issued on January 9, 2015, by the Superior Court of California to CUMIS Insurance informing them that bankruptcy status conference is now scheduled to take place on August 5, 2015. 

Each year over the past five years, we've published excerpts from Priority One's 990 IRS filing which have consistently shown that despite his long list of failures, each year, President Wiggington's salary continues to increase. Usually, salary increases are awarded for a job well-done but why would Priority One Credit Union's Board of Directors under leadership of Board Chair, Diedra Harris-Brooks deem his abhorrent and failed performance worthy of an annual increase in salary?   

The latest available filing is for 2013 and unlike the filings submitted by the Credit Union in previous years, the 2013 filing omits the salaries of several of the Credit Union's top officers including Executive Vice President, Rodger Smock, COO, Yvonne Boutte, and Vice President of Lending, Patricia Loiacano. 

As referenced below, in 2013 Charles R. Wiggington, Sr. was paid $164,484. The amount may not be astounding compared to the salaries paid to CEO's of other companies but it is an immense amount paid to a man whose failures caused the closure of six (6) of the Credit Union's nine (9) branches during the period of 2010 through 2014. 

It is also an immense amount when one considers that under his leadership, the Credit Union's Net Income dropped by more than $20 million.

He was also found guilty of sexual harassment in 2008 and due  to his violation of state and federal laws the Credit Union was sued by four (4) former employees and one Member. The Credit Union moved quickly to settle each complaint though after issuing payment, the President boasted that the amount of the settlements paid out were inconsequential to the failing Credit Union. 

Its also interesting that many in his staff have not received salary increases for more than four (4) years.

HOW DO YOU STEAL $1 MILLION WITHOUT BEING NOTICED?

It is highly possible that the person stealing $1 million from Priority One's Los Angeles branch will be prosecuted and possibly ordered to repay the stolen funds, but a bigger issue plaguing the Credit Union is its failure to protect Credit Union's assets. This is not the first time thefts have occurred and evidently, the thefts have not been sufficient motivation for Priority One's President, Charles R. Wiggington, Sr. and the Board of Directors and Supervisory Committee to develop and implement effective measures that succeed in reducing or all together eliminating internal thievery. 

Stealing $1 million occurred during an approximate twenty-four (24) month period. According to the Credit Union, the thefts began at the end of 2010 and probably continued through the end of 2012. An audit conducted in February 2013 by the Credit Union's in-house auditor revealed the theft which was attributed to the AVP who had been assigned to the Los Angeles branch and who was an employee of the Credit Union for approximately 40 years. So has the credit union audited that branch's records for the years prior to 2010? The Los Angels office was also the site of the theft of $60,000 embezzled by a former receptionist. That theft was discovered months after being perpetrated during an audit conducted by Turner, Hwang, Conrad, and Turner, the same firm currently being sued by CUMIS. Years earlier, a large number of Travelers Cheques were stolen from that office. An employee was never found and soon afterwards, the Credit Union ceased selling Travelers Cheques.

The Credit Union's Accounting Department monitors money provided and received from branches. So why didn't the department ever notice discrepancies in the reports provided by the Los Angeles branch? Ultimately, however, it is the overpaid President and the ignorant Board of Directors and evidently, equally inept Supervisory Committee that is responsible for the safety of Credit Union assets. Despite this fact, the President has over the past eight (8) years avoided accountability for his failures, finding protection in his patron, Board Chair, Diedra Harris-Brooks.

What's more, each year, Supervisory Committee Chair, Cornelia Simmons, publishes her address in the Annual Report assuring readers that her committee has once again found that all is safe and well at a credit union bombarded by thefts, losses, and violations of state and federal laws. Is Ms. Simmons' so out-of-touch or so immersed in denial that she can't differentiate between what defines a sound running Credit Union and one subjected to an abhorrent state of management? 

The following address signed by Supervisory Committee Chair, Cornelia Simmons, and appeared in the Credit Union's 2013 Annual Report, inappropriately titled, "Maintaining Forward Progress". The statements made by Ms. Simmons were written only four (4) months after an audit revealed the theft of $1 million allegedly stolen by an AVP. 

Over the past five years, CUMIS ignored the filing of four (4) lawsuits by former employees and one lawsuit filed by a former Member, opting instead to maintain its relationship with the troubled Credit Union. We know this because CUMIS' representatives called some of the Plaintiffs who filed lawsuits to inquire about why they were suing Priority One Credit Union.  

Furthermore, in 2010, CUMIS conducted an investigation of a claim filed by Priority One for monies taken by two married Members who withdrew all the money from their HELOC after the date the loan was scheduled to be closed. The reason the Members succeeded in withdrawing the funds is because the staff in Priority One's Real Estate Department failed to close the loan leaving it open and vulnerable to the dishonest couple. During the investigation, CUMIS' investigator contacted former employees once assigned to the Real Estate Department to ask if the failure to close HELOC's on their scheduled dates was a frequent occurrence. The employee told CUMIS' investigator that the failure to close HELOC's on their scheduled ending date, was not uncommon.  

Its also suspicious that following the 2010 disclosure that more than $60,000 had been stolen by the former receptionist of the Los Angeles branch, that President Wiggington, Board Chair, Diedra Harris-Brooks, then AVP, Beatrice Walker, and EVP, Rodger Smock, decided that they would not file a criminal report with police authorities in an effort to avoid adverse publicity to the waning credit union. However, the police were contacted after the incident was first reported in this blog and only after former Board Director, Janice Irving, demanded the former receptionist be prosecuted.

In 2013, Mrs. Harris-Brooks and the President decided not to call the police for fear the theft could result in more adverse publicity and cause Members to lose confidence in the Credit Union's ability to protect their assets. However, what they did not expect was that CUMIS would not only file a complaint with police authority but would initiate legal action against the former AVP and against the Credit Union's accounting firm, Turner Warren Hwang Conrad AC. We can't comprehend why police authorities were not contacted following findings that $1 million ha been stolen. The refusal by the Credit Union to initiate legal action against the AVP has caused us to wonder, what is it that the President and Board Chair are hiding? 

Three COO's

• During the years (2010-2012) the thefts occurred, Priority One had three Chief Operations Officers in place. The first was Beatrice "Bea" Walker during whose infamous stay the theft of $60,000 embezzled by a former receptionist of the Los Angeles branch was discovered. Based on the Credit Union's own disclosures, the thefts which would ultimately amount to $1 million began in late 2010 while Ms. Walker remained COO. However, Ms. Walker was terminated in July 2011 after her efforts to oust the President failed and after the Board discovered that she had described them as uneducated and unqualified to serve as Directors. 

• The second COO was the equally notorious, Cindy Garvin. Ms. Garvin began her employment in August 2011 under much fanfare initiated by Executive Vice President, Rodger Smock, who proclaimed her expertise in real estate and consumer lending, marketing and business development. She was terminated at the end of 2012 for failure to perform her duties and only after the President discovered that she described the President as incompetent and ignorant. 

• Currently, the infamous Yvonne Boutte serves as Vice President of Operations. Ms. Boutte has no prior experience as a COO. Her former capacity was overseeing the credit union's collections department. In 2012, she attempted to subjugate a Member into submission and provoked a lawsuit which was quickly settled by the Credit Union for approximately $20,000. It is also Mrs. Boutte who in March 2012, disclosed the reason why the AVP was terminated and revealed that more than $1 million in cash had been stolen from the Los Angeles branch's vault. She not only violated laws governing confidentiality, she also defamed the former AVP. 

Source: https://twitter.com/priorityonecu

Priority One Credit Union may not be any Member's Financial Fitness Center and it may not know how to help any Member or employee Win with Money, but its security measures are sufficiently lax and ineffective to allow opportunities for some employees to successfully abscond with Credit Union and Member funds. If the former AVP is indicted, tried and convicted, she could be incarcerated. And if her bankruptcy filing is approved, it could help her avoid having to pay any ordered restitution. However, none of this explains how a single individual could steal more than $1 million in cash without the President, Executive Vice President, the Accounting Department, the Board of Directors or the Supervisory Committee ever noticing. 

We've no doubt that the Credit Union's ability (or inability) to protect Credit Union and Member assets will be a subject of debate in the lawsuit filed by CUMIS against Turner Warren Hwang and Conrad AC; and in the lawsuit filed by Turner Warren Hwang Conrad against Priority One Credit Union. And expect the President, the Board Chair and other officers of the Credit Union to scramble and concoct stories which may help them escape accountability for the blunders they alone committed.      

Oops, They Did It Again

Out of Their Control

2015 may prove to be the most embarrassing year experienced by Priority One Credit Union in South Pasadena, California since January 1, 2007, the date when Charles R. Wiggington, Sr. was appointed President and CEO of the once successful Credit Union.

We've been away for a few weeks, though during our absence, one astute reader of this blog, posted the following comment::

Chief Jay Strongbow said...

John, Did you see the article on Priority One in the on-line edition of Credit Union Times today about the $1 million theft and accompanying lawsuit? Any more insight on it?

March 9, 2015 at 11:32 AM

The article the reader alludes to was written by David Morrison and appears in the March 7, 2015 edition of the CU Times. Mr. Morrison wrote that a former, long-time employee of Priority One Credit Union, embezzled more than $1 million from the Los Angeles branch. 

In March 2013, we reported that then AVP, Lynnette Fortson ("Pearl Lynnette Fortson") left the Credit Union abruptly, after more than forty (40) years of service. Her sudden departure surprised many employees, resulting in myriad of rumors alleging she resigned, she was terminated, and she was laid off Her departure also prompted complaints from many employees of the Los Angeles Postal Distribution Center ["LAPDC"], the facility where the Credit Union's Los Angeles branch is located. 

Within a few days following Ms. Fortson's departure, Vice President of Operations, Yvonne Boutte, revealed to some staff members in South Pasadena and at the Los Angeles branches, that Ms. Fortson had been terminated for stealing money. 

In January 2013 and prior to Ms. Fortson's termination, Mrs. Boutte told some of her staff at the South Pasadena branch that she would be temporarily relocating to the Los Angeles branch during which she would conduct an investigation in response to mounting Member complaints alleging abusive treatment by the staff in the Los Angeles branch. 

In February 2013, Mrs. Boutte revealed that Ms. Fortson left the Credit Union on a personal leave of absence because she allegedly did not wish to be present during Mrs. Boutte's investigation.

However, at the end of February, in-house auditor, Diane Huffman, arrived at the Los Angeles branch where she conducted a three day investigation of that office's records. At the time, the President and Board Chair, Diedra Harris-Brooks perpetrated a hoax to try and hide the fact an audit was being conducted. On the day Ms. Huffman arrived, Mrs. Boutte posted a notice on the Los Angeles branch's doors, informing Members and visitors that the Branch was closed due to a power outage. The Credit Union posted the same message on their Facebook and webpages. As usual, the lie perpetrated by the President and Board Chair, was exposed. Members began reporting that though the Branch was closed due to a power outage, the lights in the branch remained on and employees could be seen working at their desks. At the time, we contacted the LAPDC to inquire about the outage, but we were told there were no reported outages for any part of the vast postal complex which includes the Los Angeles Branch. 

The President and Board Chair's simplistic and juvenile lie was also proven to be a lie when Mrs. Boutte warned the staff at the Los Angeles Branch that they were prohibited from ever speaking to Ms. Fortson. 

In reading comments posted in response to our previous blog publication, that a few supporters of the President seem ignorant about the latest predicament the Credit Union finds itself embroiled in. What's more, the theft of $1 million is not the first internal theft to occur at the Los Angeles Branch. In late 2009 and early 2010,  Turner, Hwang, and Conrad AC conducted an audit and discovered that more than $60,000 had been embezzled by a former receptionist assigned to the Los Angeles branch. This latest incident serves to again bring into question the ability of the Credit Union and its deficient Board of Directors, to protect Credit Union and Member assets. All indicators suggest that Priority One's security protocols are either outdated, ineffective, or not being practiced by executive and non-executive personnel. 

Since Charles R. Wiggington, Sr. was appointed President on January 1, 2007, the Credit Union has often found itself immersed in embarrassing scandals. Not only have many of the President's actions proven detrimental to the Credit Union but his immense ineptitude and illegal activities have been well protected by the Board of Directors. Since 2007, the Board has done everything in its power to ensure evidence of the President's abuses and illegal acts is suppressed. To ensure the President escapes retribution, the Board Chair and President have used Priority One's monies as their own personal piggy bank, hiring attorneys who fabricated defenses impugning the character of former employees and one Member victimized by President Wiggington and the Credit Union's unethical Human Resources Department. The evidence proves that under Mrs. Harris-Brooks, the Board has failed to:

• Set policies that ensure growth, development and the protection of Credit Union and Member Assets. 
• Made certain the Credit Union maintains a sound financial condition.
• Established and maintained channels of communication that inform Members about services and products the Credit Union offers that will enhance and improve a person’s financial well-being.
• Ensured executive officers achieve goals and objectives
• Provided truthful and undistorted information to Members during the Credit Union's annual meeting concerning the credit union's actual financial state.

And though internal thefts have been a problem plaguing the Los Angeles branch, they represent a betrayal of the confidence Members should have in the Credit Union's ability to protect their assets. Other illegal and unethical acts committed by the President include:

• Ordering repossession of an automobile that was subject to collection proceedings, though the Member had signed a repayment plan which would have allowed him to retain his BMW and become current. The President who only buys BMW’s, ordered the vehicle repossessed. He transferred ownership to himself and documented fictitious documents to create the appearance the vehicle had been sold at auction. 
• In 2008, President Wiggington was found to have committed sexual harassment yet the Board spent thousands of dollars squashing the evidence.
• In 2009 through 2011, former COO, Beatrice Walker, made numerous personal purchases which she was reimbursed for including buying a $5000 laptop. She also had workman hired to install new carpeting at the South Pasadena branch, deliver and install left over carpeting at her home in the Santa Clarita Valley. 
• From 2010 through 2013, the Credit Union was sued by four (4) former employees and one now former Member, all who alleged violations of Federal law committed by President Wiggington, by former COO, Beatrice Walker, and by Human Resources which is under management of Executive Vice President, Rodger Smock. The cases were settled by the Credit Union  in an effort to avoid what would have been nasty and embarrassing court trials.

Here is the article authored by David Morrison which appeared in CU Times on March 7, 2015:

$1M Vault Pinch Hits Priority One

By David Morrison, March 7, 2015

A long-time employee of the $146 million Priority One Credit Union allegedly stole more than $1 million, according to a legal complaint filed by the CUMIS Insurance Society against the credit union’s former accounting firm.

The complaint alleged the credit union’s manager of its Los Angeles branch, Pearl Lynette Fortson, began to remove cash from the branch’s vault in late 2010 and allegedly falsified daily reports to hide loss.

Fortson was hired by the credit union on Aug. 1, 1974, the complaint said, and Priority One fired her on Feb. 26, 2013.

The complaint said the credit union discovered the embezzlement in February 2013 and claimed that other people may have been involved.  CUMIS said it reported Fortson to law enforcement, but did not say how law enforcement had responded. The credit union had not yet responded to calls for information on the Fortson case and CUNA Mutual said it had no further information.

Priority One filed a dishonest employee loss claim with CUMIS, for which the insurer paid just a little more than $980,000 after the credit union’s deductible, and settled the claim. CUMIS then sued Turner, Warren, Hwang and Conrad Accountancy, the Burbank, Calif., firm that had audited Priority One’s books since 2008.

CUMIS charged the accounting firm with negligence in its auditing the credit union’s books and operations.

“Defendant TWHC knew or should have known that Fortson was employed at the Priority One Los Angeles County Branch and that one of her duties was to perform reconciliations for that branch,” CUMIS argued in its complaint.

“Defendant TWHC knew or should have known that Fortson maintained singular control over the vault and vault balancing sheets for Priority One’s  Los Angeles Branch,” CUMIS added. “If defendants had ever opened the vault, counted the vault cash, reconciled the counted vault cash to the general ledger account or reviewed the balancing sheets prepared by Fortson during the course of their reconciliation of cash accounts, the fraud and embezzlement scheme would have been discovered by defendants,” CUMIS added.

Turner Warren referred calls about the case to its attorney, Randall Dean of the Los Angeles firm of Chapman, Glucksman, Dean, Roeb and Barger. 

Dean declined to comment at length on the case but said the firm considered it entirely without merit, adding that Turner Warren planned to fight it at trial in June of this year.  He also noted that Priority One had not brought the suit and had not expressed any disappointment with the firm's actions.

Source: CUTimes Article

Turner, Warren, Hwang and Conrad's attorney concedes that Priority One didn't file a lawsuit against his client nor ever expressed dissatisfaction with any work performed by its auditors. Clearly, President Wiggington's defenders, have ignorantly declared that the Credit Union filed the lawsuit against Turner, Warren, Hwang and Conrad when it is CUMIS who filed the lawsuit. . 

Following the filing of CUMIS' complaint, Turner Warren Hwang and Conrad AC  responded and on December 5, 2014, filed a lawsuit against Priority One Credit Union. 

In their complaint, CUMIS accuses the auditing firm of failing to identify thefts occurring at the Los Angeles branch, during their 2009/2010 audit. We hope that CUMIS has sufficient evidence needed to prove their allegations. The audit of Los Angeles Branch's records specifically reviewed documentation handed to the auditors by AVP, Pearl Lynette Fortson. Did she provide all documentation including those records that might have proven her duplicity in embezzlement of Credit Union funds? There is also the matter about the President's responsibility to ensure all security protocols are in place and being practiced by all staff Members. And aren't the Board of Directors and the Supervisory Committee responsible for ensuring all policies are being adhered to by every employee of the Credit Union? Couple this with the fact that prior to the 2009/2010 audit, a former receptionist absconded with more than $60,000 suggesting that neither the President or the two governing bodies performed their due diligence. We believe CUMIS is placing its hope and focus on the alleged failure by the auditing firm to identify the theft of $1 million by the then AVP of the Los Angeles branch though ultimately and as CUMIS knows, the responsibility to police its own records is the Credit Union.

In 2010, the Board, the President and then COO, Beatrice Walker, agreed they would not report the former receptionist to authorities in an effort to avoid public disclosure of the theft. Of course, within weeks following our expose' of the theft, the Board was forced to contact police authorities and the former receptionist was indicted and eventually convicted though she only received probation for the theft she perpetrated. 

CUMIS has leveled accusations against Turner, Warren, Hwang and Conrad which means they have the burden of proving their assertions. Can CUMIS prove beyond a reasonable doubt that at the time of their 2009/2010 audit, Turner, Warren, Hwang and Conrad were presented with a real general ledger and real balance sheets that contained evidence the AVP had absconded with $1 million?  During that audit, Ms. Fortson provided auditors the documents they eventually reviewed. Does this at all seem like a conflict of interest? We also have to believe that if Ms. Fortson perpetrated a crime that she would have done everything in her power to cover up the evidence. We certainly hope CUMIS won't try to deter attention away from the President, the Board, and the Supervisory Committee and from the fact that it was Ms. Fortson who had complete control over vault cash, general ledgers and balance sheets belonging to the Los Angeles branch.

Another fact is that CUMIS is well aware of every lawsuit filed against the Credit Union by four former employees during the years of 2010 through 2013 and they are also aware that President Wiggington was found guilty of sexual harassment in 2008. Despite these well recorded incidents it was CUMIS who decided to maintain relations with the Credit Union. 

What's more, in 2010, an auditor from CUMIS discovered that the Credit Union had at times failed to close checking accounts belonging to Members who were granted HELOC's. In 2010, a couple withdrew the money for the HELOC after the date the account should have been closed and CUMIS, paid the claim filed by the Credit Union. At some point one has to ask why knowing what they do about President Wiggington and the Credit Union's abuses and negligible acts, would they continue a working relationship with what is probably the industry's biggest pariah? Here is the summary of the lawsuit filed by Turner Warren Hwang and Conrad AC: 

Case #EC063303

Plaintiff: Turner Warrne Hwang and Conrad Account VS Priority One CU

Filing Date: 12/05/14

Case Type: Other Contract (General Jurisdiction)

Status: Pending

Future Hearings

05/04/2015 at 08:30 am in department B at 300 East Olive, Burbank,  CA 91502

Conference-Case Management

Parties

Chapman, Gluckman and Dean- Attorney for the Plaintiff

John C. Steele- Attorney for the Defendant

Priority One Credit Union- Defendent

Turner, Warren, Hwang and Conrad- Plaintiff

Documents Filed (Filing dates listed in Descending Order)

02/02/215 Answer (to Complaint)

Filed by Attorney for Defendent

01/09/2015 Proof of Service (of Summons, Complaint, Civil Case Cover Sheet, Civil Case Cover Sheet Addendum and Statement of Location. Notice of Order to Show Cause Re: Failure to Complay with Trial Court Delay Reduction Act filed by Attorney for the Plaintiff

12/24/2014 Proof of Service of Summons and CO/Ptn

Filed by Attorney for Plaintiff

12/24/2014 Notice (of Related Case (BC541935)

Filed by Attorney for Plaintiff

12/05/2014 Notice- Case management Conference

Filed by Clerk

12/05/2014 Complaint filed- Summons issued

12/05/2014 Summons Filed

12/05/2014 OSC- Failure to File Proof of Service Filed by Clerk

During the month of December 2014, Ms. Fortson called former employees of the Credit Union and stated she hired an attorney who she explained, was conducting an investigation to acquire evidence that her reputation had been slandered by the Credit Union. Though we do believe her reputation was slandered by Vice President, Yvonne Boutte, who in March 2013 revealed the reasons why Ms. Fortson was termimated, we believe her obtainment of an attorney is to defend her against the police report filed by CUMIS which accuses Ms. Fortson of perpetrating fraud. 

On March 15, 2015, comments were posted in response to our previous past congratulating the President and Board for suing Turner, Warren, Hwang and Conrad. Unfortunately, the President's supporters are either ignorant of the fact or intentionally trying to distort what actually transpired. What we wonder is if the comments are being posted at the request of the President or based on disclosures made by the President. Is Charles R. Wiggington, Sr. telling people that Turner, Warren, Hwang, and Conrad are guilty of negligence for not having identified the thefts allegedly perpetrated by the former AVP during audits of the Los Angeles branch's records? If true, then he has slandered Turner, Warren, Hwang, and Conrad and may be placing Priority One in yet another legally precarious position. 

Inarguably, Priority One never had any intent of reporting the AVP to police authorities but they and Board Chair, Diedra Harris-Brooks, may not have thought that following their investigation of the incident, CUMIS would contact police authorities and file a lawsuit against the accounting/auditing firm. 

There is no doubt that this latest legal entanglement will force the Board to again dig deep into the Credit Union's coffers to pay for expensive attorneys and litigation. Since Charles R. Wiggington, Sr. became President, the Board has made it a habit of pillaging the Credit Union's monies to cover-up negligible and illegal acts that only occurred due to the Board's inability to fulfill its appointed responsibilities which includes ensuring the well-being of the Credit Union. This latest scandal to rock the Credit Union again reveals that this Board is unconcerned with the safety and well-being of Credit Union and Member assets. 

Lie with Dogs, Get Up with Fleas

We could probably devote several posts to the subject of Turner, Warren, Hwang, and Conrad's and CUMIS' decision to enter into and maintain relations with Priority One and its notorious President. Most ethically managed companies might avoid establishing any relationship with a company whose recent history is marred by abuses of authority, violations of state and federal laws, and saturated by acts of overt negligence.

We actually hope the auditing firm wins despite our belief they compromised ethics when choosing to do business with the Credit Union. For CUMIS to win their lawsuit requires they prove the auditing firm failed to identify the theft of $1 million during its 2009/2010 audit and possibly any audits of the Los Angeles branch's records that may have been conducted by the accouting firm in 2011 and 2012. We can't imagine how CUMIS intends to explain how during the 2009/2010 audit of the Los Angeles offices records discovered more than $60,000 embezzled by a former receptionist but missed evidence proving the theft of $1 million. 

CUMIS may also have to prove that at the time of their audit(s), Turner, Warrne, Hwang, and Conrad were provided genuine records by Ms. Fortson. As stated previously, it seems a conflict of interest that when thefts were being investigated, Ms. Fortson was present while auditors perused records. Furthermore, it was she who provided them the documentation they audited.What's more, how was the auditing firm able to find evidence $60,000 were stolen by a former receptionist but missed all together, evidence of a theft of $1 million allegedly perpetrated by Ms. Fortson? Something seems awry and we believe CUMIS needs to provide something substantial that doesn't leave the impression they are trying to aid the Credit Union to escape accountability for its failure to ensure security measures were in place and being performed on a daily basis. At the moment, it appears that CUMIS' lawsuit is using Turner, Warren, Hwang and Conrad as a scapegoat in their effort to recuperate the $980,000 paid against the claim filed by the Credit Union.

It is important to note that the Credit Union only became aware of thefts perpetrated at the Los Angeles branch, AFTER Members complained money was missing from their accounts. 

Finally, where is the Supervisory Committee? They are responsible for ensuring Credit Union and Member assets remain safe and protected. Since we began publishing in 2009, the committee comprised of Board Chair, Cornelia Simmons; Anna Smith the Secretary; Hazel-Brown-Harvey; Lorenzo Ford; and I.D. Williams has remained invisible though each year, attendees of the Annual Meeting are subjected to Cornelia Simmons' scripted and boring assurances that everything is running well at Priority One Credit Union and never alluding to the thefts plaguing the Los Angeles branch. Its about time the supervisors were ousted and replaced with people who actually understand the purpose of their role on the committee. . 

In the meantime, we can all be assured that the destructive dynamic which has left Member accounts vulnerable to theft, remains soundly in place at Priority One Credit Union.