Gardai investigate fraud at Gorey Credit Union

Gardaí are investigating a suspected fraud at a credit union that has cost it almost €160,000 in the past year, it was confirmed yesterday.

Co Wexford-based Gorey Credit Union's accounts for the 12 months to the end of September show that €86,847 was misappropriated from its funds during the year. On top of that, a number of investigations into the issue cost the financial institution €70,458. This brought the total cost of the suspected fraud to €157,305.

The Credit Union's board told members at its recent annual general meeting (a.g.m.) that the matter had been reported to gardaí, who were investigating it. In addition, the credit union sacked an un-named member of staff after audits were carried out by it and the Irish League of Credit Unions (ILCU).

According to the board's a.g.m. statement, loans were issued on fictitious accounts and records were falsified in relation to other accounts. The board also admitted there was an unconnected incident during the year in which an unspecified amount of money was removed from some accounts. This led to another dismissal and the gardaí are also investigating this.

Gorey Credit Union, which has total assets of €55 million, has since made a claim for the full amount under its fidelity bond, a specialised insurance policy. It is unlikely that its 16,000 members will be out of pocket as a result of the fraud.

Members were hugely critical of management at the a.g.m. ILCU chief executive Mr Patrick Fay attended the meeting and stated publicly that the league had warned management that various steps needed to be taken to strengthen controls and procedures at Gorey Credit Union.

Mr Fay told The Irish Times yesterday that the board had since taken these steps.

"Corrective action had already been taken by the time of the meeting," he said. These included appointing an assistant manager and improving the credit union's accounting system.

The Irish Financial Services Regulatory Authority's registrar of credit unions, Mr Brendan Logue, said yesterday that his office had sent an inspector to Gorey Credit Union. "We are satisfied that they are doing all they can to resolve the situation," he said, stressing that no Irish credit union member had ever lost money as a result of fraud.