Whistleblower Lawsuit Against South Florida Federal Credit Union Amended By Tod Aronovitz | 02/11/14 | 0 Comment

Allegations of sexual misconduct, nepotism and National Credit Union Administration (NCUA) violations are at the center of a whistleblower lawsuit filed by two former employees of South Florida Federal Credit Union (FCU) and its president/CEO Maggie Martinez. The former employees filing the lawsuit allege they were let go for cooperating with an investigation by the NCUA, according to a Credit Union Times article on January 30.

Plaintiffs Christine Redmond, former director of marketing at South Florida FCU, and Tanishal Harris-Darden, former operations manager at the credit union, claim in court documents that they were fired before they could tell federal regulators about a relationship Martinez had with a credit union member—making several risky loans with preferential terms and conditions to him—in addition to making other questionable lending financing to her friends and family members.

The suit, which was originally filed on September 5, was recently amended on January 27 in the U.S. District Court in Miami. A jury trial is set for October 20.

Among the allegations, the plaintiffs claim that:

    • Martinez hired four relatives despite their lack of qualifications. Two nephews allegedly took money from members by not properly posting payments and deposits, the complaint discloses.
    • Martinez proposed lowering interest rates on 20 mortgages to the advantage of family members, and loaned $40,000 to a family member in financial peril. This resulted in $35,000 in charge-offs due to default, the complaint said.
    • Martinez allegedly required all employees to provide passwords and user names, so that Martinez could log on to all systems and databases via email. She used an email address that she could access both at the credit union and at home without the required encryption mandated by the NCUA, according to the complaint.
    • South Florida FCU violated numerous NCUA regulations, including those that prohibit compensating board members. The credit union supposedly gave board members $500-$750 gift cards and iPads, and provided family members with preferential treatment such as employment and no-bid vendor contracts, the complaint states.

In response, South Florida FCU denies all allegations. In court documents, the credit union maintained that the termination of its two employees were legitimate and unrelated the NCUA investigation, adding that Redmond was fired before the investigation took place and stated that she never previously filed a complaint to the board, the attorney general or the administration about any possible legal violation or wrongdoing.

On a side note, South Florida FCU filed an application on October 2 (after the NCUA investigation) to convert to a state charter, according to the Florida Office of Financial Regulation’s Division of Financial Institutions. However, the state received a written request from Martinez to withdraw the application in late December, state officials said.

ARONOVITZ LAW: Miami Whistleblower / Qui Tam Law Firm
The Miami Qui Tam law firm of ARONOVITZ LAW routinely works with Miami whistleblowers to document Medicare fraud and other forms of fraud against the government. Contact Miami Whistleblower / Qui Tam lawyer Tod Aronovitz to discuss a case.