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FBI Investigates CFO's $20 Million Embezzlement.

Byline: Peter Strozniak

To explain how he was able to afford a $4.5 million home on a $65,000 annual salary, the former CFO of Clarkston Brandon Community Credit Union told his wife that he was getting big returns from stock investments. He told credit union colleagues that he got a big inheritance.

In reality, Michael Anthony LaJoice (pictured in his mugshot here) supported his wealthy lifestyle with the $20 million he allegedly embezzled from the $68 million, Clarkson, Mich.-based cooperative over 12 years.

On Monday, the FBI's Detroit office confirmed it was involved in the criminal investigation launched by detectives with the Oakland County Sheriff's office in Pontiac, Mich.

While he admitted the alleged embezzlement to stunned police investigators last week, LaJoice, 36, pleaded not guilty to 14 counts of embezzlement Friday in Oakland County 52-2 District Court and was listed as an inmate in Oakland County Jail as of Monday afternoon. His bond was set at $1 million.

"I'm in my 39th year, and I never heard of this much money being embezzled from a financial institution," Michael McCabe, undersheriff and chief deputy for the Oakland County Sheriff, told CU Times Monday.

McCabe, who was briefed by detectives investigating the case, said LaJoice left the credit union late Monday afternoon on Jan. 4 after he was questioned about discrepancies uncovered by an ongoing audit.

LaJoice allegedly said the discrepancies were a mistake, left the credit union's office and never returned.

"He did not go home that night, and at about 9 a.m. Tuesday morning, he walked into our office," McCabe said. "So he basically knew the jig was up."

LaJoice allegedly admitted to investigators that he embezzled the funds and concealed the crime through fake transactions and investments.

"At this point, he claims no one else is involved, but we don't know for sure," McCabe said. "The FBI is involved in this investigation. We had preliminary discussions with the attorney general's office and the FBI on Friday. We'll see where it goes from here."

He did not know whether the case would be handed over to the FBI.

Sheriff detectives used search warrants last week to confiscate a safe, computers and records from LaJoice's 5,800-square-foot home that was originally reported to be valued at $1.3 million.

"We determined he put at least $4.5 million into that house," McCabe said. "He paid cash for the whole thing. He told his wife he was doing really well in the stock market, and he told people at the credit union he had a big inheritance to explain the lifestyle he was living."

The house featured a nine-seat movie theater, three sets of washers and dryers, and other top-of-the line appliances, according to police.

Rob Novi, an assistant prosecutor for Oakland County, confirmed investigators found seven accounts totaling $800,000, and based on his experience, more accounts are likely to exist.

In addition, LaJoice founded LaJoice Properties LLC in April 2015. That company publicly announced plans in October to build a retail and residential project that local media reported was the biggest development project in the history of Fenton, Mich., located about 60 miles northwest of Detroit. He has also been the owner of ChassA(c) Ballroom and Latin Dance Studio in Fenton since June 2007, according to his LinkedIn page.

In a local newspaper interview in February 2015, LaJoice described himself as an "accountant by day and a dance studio owner by night."

LaJoice was hired as the credit union's CFO in May 2003.

"We are awaiting the discovery materials from the prosecution," Michael P. Manley, a Flint, Mich.-based lawyer who is representing LaJoice, said. "Once we get the police reports, we will conduct our own investigation to see if the statements attributable to my client by law enforcement are in fact true. We plan on defending Mr. LaJoice to ensure he receives his right to due process."

Police said several auditors from the NCUA are currently at the credit union conducting an investigation.

Ben Hardaway, a spokesperson for the NCUA, said Monday that he is not allowed to comment on supervisory matters.

"The state [Michigan Department of Insurance and Financial Services] is the primary regulator of the institution in question," he said. "They are the lead regulator, so you would have to direct all inquiries about the credit union to them."

State officials could not be reached for comment Monday, and the DIFS did not have any statement posted on its website pertaining to Clarkston Brandon Community CU.

Donna B. Bullard, president/CEO of Clarkston Brandon Community CU, said in a prepared statement Friday that the credit union is conducting an investigation and would not comment further while it is under way.

"Members will be updated in the future when more information is available," she said.

Bullard also assured the credit union's 9,143 members that it's "business as usual" at the credit union and their accounts are safe because they are insured by the NCUA.

Dave Adams, president/CEO of the Michigan Credit Union League, said in a prepared statement Monday that the league reached out to the credit union and the state regulator.

"MCUL has offered to help both CBCCU and DIFS with the investigation in any way that it can," Adams said.

Although he said internal fraud and embezzlement cases are very rare at credit unions and banks, they are a reality for any business that deals with the public's money.

Michigan's last major embezzlement case involved Sharon Broadway, a former president/CEO of the $300,000 United Catholic Credit Union in Monroe, who was sentenced in January 2013 to 20 years in prison for embezzling $2.1 million. She managed to conceal her crime for years through a complex money laundering scheme involving forged checks and multiple aliases.
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Publication:Credit Union Times
Geographic Code:1U3MI
Date:Jan 11, 2016
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