NCUA dismisses lawsuit against former Kansas Credit Union leader



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Official seal of the NCUA. (Source: NCUA)

The NCUA has dismissed a lawsuit against a former credit union executive who for months ignored the federal agency’s subpoena seeking documents relating to more than $ 600,000 in auto loan losses.

According to court documents filed by the NCUA in September, Lori Knight, former executive vice president of loans at the $ 37 million Equishare credit union in Wichita, Kan., Finally handed over the documents the federal agency had been seeking ever since. December 2020. The lawsuit has been filed in the United States. Wichita District Court.

Knight abruptly resigned in November 2018 after Equishare Chairman / CEO Gary Torres presented him with a list of loans for vehicles that had been repossessed and sold. But the proceeds from the sale of those vehicles would not have been used for loans, according to documents filed by the Kansas District Attorney’s Office on behalf of the NCUA.

Knight, who had worked at Equishare for over 20 years, was responsible for the indirect loan program. She was also responsible for making decisions on loan applications and administering the repossession of vehicles, selling them and allocating the proceeds from those sales to loans.

In October 2018, Torres discovered that the proceeds of two checks for the sale of repossessed vehicles had not been applied to the balances of the loans guaranteed by the vehicles, according to court documents. He discovered that both checks had been cashed or otherwise presented for payment. The CEO also found many other examples of repossessed vehicles that had been sold, but the money from those sales would not have been allocated to the appropriate loans.

Torres suspended Knight for violating credit union policies, pending further investigation. He set up a meeting with Knight on November 16 to discuss his concerns. An hour before the meeting, however, Knight emailed Torres that she was resigning from her job immediately, the NCUA said in court documents.

The credit union hired an outside auditor to review Knight’s business. The audit reportedly concluded that “over $ 600,000 in losses to Equishare (were) attributable to Knight’s breaches of credit union policy, including granting loans in violation of the loan policy,” reported indicated court documents.

To determine whether Knight derived any benefit from the alleged “misapplied products,” the NCUA served him with a subpoena on December 9, 2020. The subpoena asked him to turn over documents such as credit or deposit accounts. , account statements, receipts, invoices. sales or rental documents, and other documents from November 2015 to the current date.

Knight had until December 28 to respond to the summons, but she reportedly ignored it. The NCUA then sent a letter in March to Knight asking him to contact the independent federal agency, but it also reportedly ignored that letter.

In addition, she also allegedly ignored an “additional communication” in June from the US prosecutor’s office in Wichita.

Finally, after the NCUA filed a lawsuit against Knight in August, a federal judge ordered him to comply with the subpoena no later than September 23. She turned over the documents to the NCUA on September 14, according to court records.

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