A manager at the CBS Employees Federal Credit Union is accused of embezzling more than $40 million over two decades, federal officials announced Friday, the same day regulators announced the credit union had been liquidated.
Edward Martin Rostohar, 62, of Studio City faces charges of bank fraud and aggravated identity theft, U.S. Attorney’s Office spokesman Ciaran McEvoy said in a written statement. Prosecutors allege he used the stolen money to gamble and fund a lavish lifestyle with purchases such as luxury cars, expensive watches and private jet travel.
“He was arrested on March 12 and has been ordered detained as both a flight risk and an economic danger to the community,” McEvoy said.
The massive-scale theft began prior to 2000 and continued until this month, officials said.
It was discovered on March 6, when an employee at the credit union found a $35,000 check made payable to Rostohar, with no apparent explanation, prosecutors said. Further examination by the National Credit Union Administration discovered $40,541,130 in allegedly stolen funds.
Rostohar was suspended from his job on March 12, officials said.
“Later that day, Rostohar’s wife called 911 and told the dispatcher that her husband had stolen money from work and was leaving the country,” McEvoy said. “Rostohar was taken into custody and admitted that he stole money from the credit union for 20 years, beginning by paying the monthly balances on his personal credit cards with funds from the credit union’s online accounts or by forging checks, and later by forging his coworker’s signature on credit union checks and depositing them into his personal accounts.”
Before working for the CBS Employees Federal Credit Union, Rostohar spent 30 years working for the NCUA as an examiner.
“Rostohar allegedly told law enforcement that this background gave him knowledge of what NCUA examiners look for when examining credit unions and allowed him to avoid detection,” McEvoy said.
He told investigators he gambled away a great deal of the money, and also made purchases including expensive watches, a Porsche, a Tesla, travel on private jets, a business and a home in Reno Nevada, according to prosecutors. He also allegedly provided his wife an allowance of $5,000 per month from the ill-gotten proceeds.
The announcement of the charges by federal officials coincided with an announcement by the NCUA on Friday that the agency had liquidated the CBS Employees Federal Credit Union, “after determining the credit union was insolvent with no prospect of restoring viable operations on its own.”
“University Credit Union, located in Los Angeles, immediately assumed CBS Employees’ assets, loans, and all member shares,” according to the NCUA statement. “The new University Credit Union members should experience no interruption in services. Members’ accounts remain insured by the National Credit Union Share Insurance Fund.
Rostohar was scheduled to appear in federal court for an arraignment hearing on April 18.
If convicted as charged, Rostohar could face up to 32 years in federal prison, as well as a $1 million fine.