UNITED STATES OF AMERICA

BEFORE THE NATIONAL CREDIT UNION ADMINISTRATION

In the Matter of

**Milton Platt,**

**Judicial Hearing Officer** *Docket BD-03-07*

Insurance Claim

**Decision and Order on Appeal**

**Decision**

This matter comes before the National Credit Union Administration Board
(Board) pursuant to 12 CFR 745.202, as an administrative appeal of the
denial of an insurance claim by the Agent for the Liquidating Agent of
Central Brooklyn Federal Credit Union (FCU). The appeal is made by
Milton Platt, a Judicial Hearing Officer (JHO), in his court-appointed
capacity to audit the account of the guardian of the property of
xxxxxxxxxxxxxxx, an incapacitated person, for whom an account was held
at the FCU.

# Background

[Central Brooklyn Employees Federal Credit Union]{.underline}

Central Brooklyn Employees FCU was a community based credit union. The
FCU was chartered in 1993. The NCUA Board placed the FCU into
involuntary liquidation on August 27, 2002 and named itself as
liquidating agent. Staff within NCUA's Asset Management and Assistance
Center (AMAC) was named as agent for the liquidating agent.[^1] AMAC
entered into a Purchase and Assumption Agreement with People's Alliance
Federal Credit Union.

 

[Xxxxxxx Account]{.underline}

On June 14, 1995, a share account was established for xxxxxxxxxxxxx at
the FCU. Xxxxxxxxxxxxx was the guardian of the property of
xxxxxxxxxxxxxxx and the account contained xxxxxxxxxxxxxxx funds. The
share account was established with an \$80,000 deposit. A statement from
the FCU covering the period of June 1, 1995 through December 3, 1996
indicates the \$80,000 deposit on June 14, 1995, and a transfer of
\$40,000 to a share certificate (a sub-account for the same member) on
the same date. The share account was drawn down reaching a zero balance
on April 29, 1996. The share certificate had a \$40,000 balance on
December 3, 1996. On May 5, 1997, the FCU sent xxxxxxxxxxxx a
confirmation of share balance as of December 31, 1996. This confirmation
indicates a zero balance in the share account and a \$40,000 balance in
the share certificate sub-account. This confirms the account information
in the statement. On September 25, 2002, attorney Grace Colson was
appointed to assist in marshalling the assets of xxxxxxxxxxxxxxx. Ms.
Colson contacted AMAC who informed her on January 14, 2003 that there
was a zero balance in the Xxxxxxx account from August 10, 1999 to August
27, 2002 (date of liquidation). In the same letter, AMAC requested Ms.
Colson gather any information evidencing the continued existence of the
account and submit it to them. Ms. Colson did not respond to this
request until January 22, 2007; she submitted no evidence supporting the
continued existence of funds in the xxxxxxx account. There was no
evidence showing any funds in an account after the FCU confirmation sent
on May 5, 1997.

On March 5, 2007, AMAC sent Ms. Colson its initial determination,
stating that there was a zero balance in the xxxxxxxxx share certificate
account from at least August 10, 1999 forward. On March 9, 2007, Ms.
Colson submitted a request for reconsideration to AMAC. AMAC denied the
request for reconsideration on April 11, 2007.

**Appeal and Analysis**

On August 11, 2006, JHO Milton Platt was appointed by the Supreme Court
of the State of New York to audit the final accounting of
xxxxxxxxxxxxxxx funds. The JHO filed an appeal with the NCUA Board on
May 4, 2007 as part of his auditing duties. The JHO submitted no further
evidence or documentation with his appeal. The JHO is seeking
information we have on the disposition of the \$40,000 placed in the
share certificate account and appeals AMAC's determination.

The only documentation available indicates a zero balance in the
xxxxxxxx account both prior to and at the time of liquidation. The
account statement reflects that the \$40,000 in the share account was
drawn down to a zero balance between June 14, 1995 and April 26, 1996.
Neither Ms. Colson nor the JHO question the withdrawal of these funds.
The May 5, 1997 FCU confirmation indicates a zero balance in the share
account and a \$40,000 balance is the share certificate sub-account as
of December 31, 1996. AMAC records indicate a zero balance in the share
certificate account after August 10, 1999. There is no record of how and
when the funds in the share certificate were withdrawn; however there is
also no evidence of fraud or other illegal action by credit union staff
regarding the \$40,000 placed in the share certificate account. Based on
the available documentation, there was a zero balance in the xxxxxxxx
account from at least August 10, 1999 forward.

**Order**

For the reasons set forth above, it is ORDERED as follows:

The Board upholds the Agent for the Liquidating Agent's decision and
denies the Judicial Hearing Officer's appeal.

The Board's decision constitutes a final agency determination. Pursuant
to

12 CFR 745.203(c), this final determination is reviewable in accordance
with the provisions of Chapter 7, Title 5, United States Code, by the
United States district court for the Federal judicial district where the
credit union's principal place of business was located. Such action must
be filed not later than 60 days after the date of this final
determination.

So **ORDERED** this 25th day of October 2007 by the National Credit
Union Administration Board.

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Mary Rupp

Secretary of the Board

[^1]: All references to AMAC throughout this Decision refer to it in its
    capacity as agent for the liquidating agent.