FORMER CREDIT UNION CEO CONVICTED OF CONSPIRACY , EMBEZZLEMENT , BANK FRAUD , TAX FRAUD , FALSE ENTRIES AND OBSTRUCTION OF EXAMI

Springfield, MA... The former Chief Executive Officer and Treasurer of the D. Edward Wells Federal Credit Union ("Wells"), were convicted today by a federal jury of multiple counts of fraud in a complex embezzlement and cover-up scheme that lead to the demise of the Wells credit union.

(www.allCUnews.com [1]) - Springfield, MA... The former Chief Executive Officer and Treasurer of the D. Edward Wells Federal Credit Union ( “Wells” ), were convicted today by a federal jury of multiple counts of fraud in a complex embezzlement and cover-up scheme that lead to the demise of the Wells credit union.

Assistant Attorney General Nathan J. Hochman of the United States Department of Justice’s Tax Division, United States Attorney Michael J. Sullivan, Patricia J. Haynes, Special Agent in Charge of the Internal Revenue Service Criminal Investigation in New York, Douglas A. Bricker, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation - Boston Field Office and Warren T. Bamford, Special Agent in Charge of the Federal Bureau of Investigation New England Field Division, announced that CAROL ARANJO, 67, along with her husband, ALPHONSO SMITH, 69, both of Springfield, MA, were convicted by a federal jury of conspiracy, embezzlement, bank fraud, and filing false income tax returns. Additionally, ARANJO was also convicted of making false entries and obstructing the examination of a financial institution.

ARANJO ran Wells, located at 864 State Street, until February, 2003, when the National Credit Union Administration ( “NCUA” ) placed it under conservatorship in order to protect the interests of credit union members and the National Credit Union Insurance Fund ( “NCUIF” ). The NCUIF insures deposits at federal credit unions. The NCUA placed the credit union into liquidation after discovering that Wells was insolvent.

The verdict came following five weeks of testimony where witnesses described a scheme to embezzle funds from the credit union by ARANJO and SMITH by running negative balances in their personal and business accounts totaling $1.5 million, and covering up the negative balances with false entries into the credit union records. Witnesses also described a related scheme to prop up the credit union by manipulating a community loan fund to generate paper interest that made the credit union appear more profitable, and which provided Wells with additional capital allowing defendants to continue their theft. SMITH was also convicted of defrauding another financial institution in connection with the financing of the defendants’ personal residence.

The defendants face up to 30 years imprisonment, to be followed by five years of supervised release and a $250,000 fine on each of the bank fraud and embezzlement charges. Sentencing is scheduled for June 19, 2008 at 2:00 p.m. before United States District Judge Michael A. Ponsor.

The case was investigated by the Internal Revenue Service, Criminal Investigation - Boston Field Office, the Federal Bureau of Investigation - New England Field Division and the Internal Revenue Service, Criminal Investigation in New York. The case was prosecuted by Assistant U.S. Attorney Karen Goodwin of Sullivan’s Springfield Unit and Jorge Almonte of the United States Department of Justice’s Tax Division.