Alleged fraud leaves credit union in lurch
Titahi Bay woman Susan Terri Hagai appeared in Wellington District Court last week charged with employee fraud to the tune of over $1.2 million.
The 45-year-old appeared in court after $1,242,750 was allegedly obtained by deception from her employer, the Hibernian Catholic Benefit Society.
Five charges of fraud have been laid against Hagai. One relates to the Hibernians, the others allege $ 15,089 was obtained by deception from Hoff Holdings, a group of bars which Hagai worked for after leaving Hibernians.
Hagai entered no plea last Wednesday and was remanded on bail until August 24. Hagai’s arrest came after months of joint investigation by the Serious Fraud Office and Wellington police into alleged fraud committed between 2001 and 2010.
Hagai served as an office clerk for the Hibernians for about 17 years, society president Mike McBride says. She was made redundant in September 2010 after the society decided to save money by contracting accountancy firm Munro Benge to deal with its administration, he says.
The missing funds were discovered in May this year, when a Munro Benge employee began preparing the society’s accounts for its upcoming audit.
‘‘He said, ‘ Ooh, that doesn’t appear right’,’’ Mr McBride says.
Suspicions raised, Munro Benge checked further back into the society’s accounts, and discovered a large amount of money was missing.
The $1.2m went missing in equal quantities from the society and its credit union arm, the Hibernian Credit Union.
While the society has assets of $9.6 million and is financially robust, the credit union has been crippled by having $ 600,000 taken from its coffers, Mr McBride says.
The society has frozen the credit union’s funds in an attempt to stave off liquidation, and is attempting to preserve its remaining funds by transferring them to the society, to a closed fund where they will not be invested or drawn on.
‘‘Any funds recovered would go to that fund and members would decide at a later date what they wish to do [ with them].’’ A decision from the registrar of friendly societies and credit unions next week will decide its fate, Mr McBride says.
‘‘If that doesn’t get approved, the only option would be to liquidate.’’
Credit union members are devastated by the incident, not just because their investments might be lost but because the fraud is alleged to have been perpetrated by somebody they had many dealings with, Mr McBride says.
‘‘The members are extremely sad, they’re extremely disappointed.’’
Credit union members are typically parents or grandparents putting money away for their children’s educations or for trips to visit family overseas, he says.
The Hibernian Society is a ‘‘friendly’’ financial society with 2800 members across 21 branches nationwide.
It offers its members insurance, mortgages and assistance with the cost of funerals, medicine and study.
Credit unions are memberowned financial bodies which operate much like banks, providing savings accounts and loans.
TV teacher: Tawa School intermediate students Chloe Johnston, Hannah Warden and Anders Holm were filmed by the BBC last week for a programme about emigrating British teacher Rob Boraston – the film crew are Jon Bowdon and Catherine Hoskin.
Charged: Susan Terri Hagai.