Clarkston credit union under investigation agrees to merger
Clarkston — A credit union whose former chief financial officer is suspected of embezzling $20 million will merge with the Michigan State University Federal Credit Union, a state-appointed conservator announced Friday.
The Clarkston Brandon Community Credit Union will remain in operation at its current location with no anticipated interruption of services to customers, according to the National Credit Union Administration, and their deposits are insured by the NCUA.
The NCUA, a federal group which regulates and supervises credit unions, was appointed to oversee the Clarkston credit union’s operation Jan. 16 by the State of Michigan Department of Insurance and Financial Services after the arrest of Michael A. LaJoice.
The Clarkston Brandon’s credit union’s finances have been under review since police say LaJoice walked into the Oakland County Sheriff’s Office in January and admitted he had embezzled $20 million over a 12-year period at the Ortonville Road credit union.
LaJoice had been confronted one day earlier about financial irregularities that had been detected in a routine audit.
“The two agencies worked together to address issues affecting the credit union’s safety and soundness and determined that merging Clarkston Brandon Community Credit Union into Michigan State University Federal Credit Union was in the best interests of the members,” NCUA spokesperson John Fairbanks said in a news release Friday.
April Clobes, president and CEO of the MSU credit union, said they were “excited” by the merger.
“As of today NCUA is no longer conservator, the former Clarkston (credit union) board of directors and its executive officers are dissolved and we will be operating with our own board of directors,” Clobes said. “Their employees will become our employees.”
Clobes declined to discuss allegations of embezzlement or current investigations. She said the credit union’s name would be changed to Michigan State University Federal Credit Union after “transitioning” including notification of all members. She said her credit union has some “robust” business practices including internal auditing services to be instituted in Clarkston.
Prior to the merger, the MSU credit union served 208,650 members and had assets of more than $3 billion, according to the credit union’s most recent Call Report. Clobes said this is not the credit union’s first merger. In April 2013 it merged with an Eaton County credit union in Charlotte.
At the time of the merger, Clarkston Brandon credit union, founded in 1957, was a federally insured, state-chartered credit union with 8,536 members and assets of $68.5 million, according to the credit union’s most recent Call Report.
For nearly 60 years the Clarkston Brandon credit union has served anyone who lived, worked, worshiped, attended school in, and businesses in, the Oakland, Genesee, Lapeer, Livingston and Macomb counties.
While the MSU credit union has been MSU or Oakland University students, faculty, staff, alumni and immediate families, the membership will now be broadened, Clobes said.
“Everything will remain the same except it will enhance our membership in Oakland and in Ingham County,” she said.
The merger announcement comes just days after LaJoice appeared in Clarkston District Court and waived his right to a preliminary examination on 14 charges of embezzling money from the credit union.
LaJoice, 36, of Tyrone Township has pleaded not guilty to the charges, which carry up to 20 years in prison. He is being held in the Oakland County Jail in lieu of $1 million bond and is set for an April 4 hering in Oakland Circuit Court.
LaJoice’s attorney, Michael Manley, told The Detroit News all of LaJoice’s properties will be sold to help make restitution. and prospective buyers have been identified.
Sheriff’s Investigators allege records show LaJoice — a $65,000 a year CFO, father of three and with no criminal history — looted the credit union of at least $2.5 million since June 2015 to support a lavish lifestyle and fund business ventures including a dance studio and a $31-million mixed use development in Fenton.
Investigators have placed leins on all the properties and seven LaJoice bank accounts containing $800,000.
But by LaJoice’s own statements, he took much more — likely by creating bogus paperwork and phony credit union investment records still being flyspecked by local, state and federal investigators.
Officials said LaJoice, who gave generously to local charities, spent up to three times the state equalized value on several properties he sought for his ambitious project. He also reportedly sunk several million dollars into customizing and furnishing a $1.1 million home.