A Studio City man could spend up to 30 years in prison after admitting Monday to embezzling millions from the credit union he managed, using the money to gamble, purchase multiple homes and luxury cars, and give his wife a weekly allowance of $5,000, federal officials said.
Edward Martin Rostohar, 62, embezzled $40 million from the CBS Employees Federal Credit Union over the course of 20 years, according to the U.S. District Attorney’s Office for the Central District of California. He pleaded guilty to one felony count of bank fraud and is scheduled to be sentenced on Sept. 16.
Rostohar worked at the Studio City-based financial group for three decades and used his experience as an examiner at the National Credit Union Administration to avoid detection, according to court documents.
“During his approximately 20 years of embezzling from CBS Employees FCU, he used his senior position at the institution to falsify its records to hide his fraud and make [the] credit union appear to be profitable despite it suffering more than $40 million in losses as a direct result of his scheme,” the District Attorney’s Office said in a statement.
Rostohar’s actions were revealed in March after a fellow employee discovered a $35,000 check made payable to Rostohar, officials said. That employee conducted an audit and learned about $3.8 million in checks payable to the credit union manager between January 2018 and March 2019.
The credit union suspended Rostahar on March 12, telling him that an internal probe on his job performance unveiled “irregularities,” court filings said. His wife called 911 later that day and told the dispatcher that her partner had taken money from his job and was leaving the U.S.
Federal officials took Rostahar into federal custody the next day.
On March 29, the NCUA announced its decision to liquidate the CBS Employees Federal Credit Union after determining that it was insolvent. The credit union served some 2,800 CBS employees and had $21 million in assets at the time of its insolvency and purchase by another credit union, NCUA said.
Rostahar started off by paying his personal credit card balances from the credit union’s account or by falsifying checks, the District Attorney’s Office said. He eventually started forging a coworker’s signature on credit union checks and depositing them into his own accounts. He directed the stolen money to shell companies, authorities said.
He gambled away much of the money and used the rest traveling by private jet, buying expensive watches and jewelry and giving his wife a $5,000 weekly allowance, Rostahar told authorities. He also spent the money to open a coffee business in Reno, Nevada and buy a home there. That’s in addition to paying for homes in Studio City and Mexico, officials said.
Rostahar has agreed to forfeit funds, property and goods he bought with the stolen money, according to authorities.