The Edward Martin Rostohar, 62, the former manager of the CBS Employees Federal Credit Union pleaded guilty to one count of bank fraud. The judge sentenced him to 169 months in federal prison for a twenty year embezzlement scheme that caused the credit union to lose $40 million and led the financial cooperative into forced insolvency. Rostohar, a credit union manager, made online payments from the credit union to himself or by forging the signature of another credit union employee on checks made payable to himself. Rostohar used his position to falsify its records to hide his fraud and make credit union seem to be profitable even though it lost more than $40 million because of his scheme.
A credit union employee discovered the scheme after finding a $35,000 check payable to Rostohar. The employee conducted an audit and discovered about $3.8 million in checks made payable to Rostohar between January 2018 and March 2019. Rostohar apparently 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. Rostohar also started a coffee 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 costs as well as to pay a $5,000 monthly mortgage on his recently purchased Reno home.
Rostohar will forfeit his ill-gotten gains, including bank accounts in his name and the names of his shell companies, four automobiles, including a Porsche, a Tesla and a Lexus, homes in Studio City, Reno, and Mexico, luxury watches, and jewelry.