LOS ANGELES – A long-time manager at CBS Employees Federal Credit Union is in federal custody on a criminal complaint alleging he embezzled $40 million from his employer over two decades and spent the money on gambling, expensive cars and watches, and travel by private jet.
Edward Martin Rostohar, 62, of Studio City, has been charged with two felony counts: bank fraud and aggravated identity theft. He was arrested on March 12 and has been ordered detained as both a flight risk and an economic danger to the community. Rostohar’s arraignment is scheduled for April 18.
The charges against Rostohar were made in conjunction with today’s announcement by the National Credit Union Administration (NCUA), a federal agency that regulates credit unions, that it has liquidated CBS Employees Federal Credit Union and discontinued its operations after determining CBS Employees was insolvent with no prospect of restoring viable operations on its own. University Credit Union, located in Westwood, immediately assumed CBS Employees’ assets, loans, and all member shares.
According to an affidavit filed with the criminal complaint, beginning before 2000 and continuing until this month, Rostohar used his position as a manager at the credit union, a federally insured financial institution, to make online payments from the credit union to himself or by forging the signature of another credit union employee on checks made payable to himself.
The alleged scheme was exposed beginning on March 6 when a credit union employee found a $35,000 check made payable to Rostohar, and the check did not include the reason for the high dollar amount, according to court documents. The employee conducted an audit of the credit union checks issued since January 2018 and discovered $3,775,000 in checks made payable to Rostohar and which contained the forged signature of another employee without the employee’s knowledge or consent. On March 12, the credit union informed Rostohar that he had been suspended from his job after an internal investigation uncovered “irregularities in the performance of your job duties,” according to court documents. Later that day, Rostohar’s wife called 911 and told the dispatcher that her husband had stolen money from work and was leaving the country, court papers state. Rostohar was taken into custody and admitted that he stole money from the credit union for 20 years, beginning by paying the monthly balances on his personal credit cards with funds from the credit union’s online accounts or by forging checks, and later by forging his coworker’s signature on credit union checks and depositing them into his personal accounts, court papers state. Rostohar allegedly estimated he stole $40 million from the credit union. An NCUA examination up to February 28 revealed a potential loss to the credit union of $40,541,130.
Prior to his 30 years of employment at the CBS Employees credit union, Rostohar was an examiner at NCUA, court documents state. Rostohar allegedly told law enforcement that this background gave him knowledge of what NCUA examiners look for when examining credit unions and allowed him to avoid detection, the affidavit states. Rostohar allegedly said he gambled away much of the money and spent the rest on traveling by private jet, buying expensive watches, and giving his wife a weekly allowance of $5,000. He also said he purchased two cars – a Porsche and a Tesla – with money he stole from the credit union, court papers state. Rostohar allegedly also admitted to starting a business in Reno, Nevada in December 2018, and he wrote tens of thousands of dollars’ worth of checks to himself to cover the business’s cost as well as to pay a $5,000 monthly mortgage on a home in Reno he recently purchased.
If convicted on both charges, Rostohar faces a statutory maximum sentence of 30 years in federal prison and a $1 million fine on the bank fraud count and a mandatory consecutive term of two years in federal prison on the aggravated identity theft count.
A complaint contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.