NCUA bars five former credit union employees, citing fraud and misconduct.
The enforcement actions include one criminal-conviction case and four consent orders involving allegations that collectively caused millions of dollars in losses to credit unions.
The National Credit Union Administration has permanently barred five former credit union employees from working in federally insured financial institutions, citing criminal convictions and alleged misconduct that regulators say resulted in millions of dollars in losses.
The actions, announced by the NCUA on May 29, include one conviction-based prohibition and four consent-based prohibition orders issued between March 20 and May 21.
The cases span credit unions in New York, California, Illinois, Washington and Louisiana, underscoring the range of misconduct federal regulators continue to pursue across the industry.
The most significant case involved Marilyn Sullins, the former manager of Aldersgate Federal Credit Union in Marion, Ill. Sullins, who worked at the credit union from 1986 through May 2025, agreed to a prohibition order to resolve claims brought by the NCUA.
According to the agency, Sullins fraudulently prepared loan applications and distributed funds between member accounts from at least January 2020 through May 2025. A review of credit union records found the alleged misconduct resulted in more than $2 million in losses.
Another case involved Aaron Steele, a former contact center representative at The Police Federal Credit Union in San Bruno, Calif. Steele was employed from February 2023 through June 2024 and had access to member accounts and information as part of his job responsibilities.
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The NCUA said the credit union discovered in March 2024 that Steele had stolen approximately $110,000 from a dormant member account through a series of automated clearing house transfers and ATM withdrawals. Steele agreed to a prohibition order without admitting or denying the agency’s claims.
In Seattle, Melissa Biscayno, a former consumer lending specialist at Seattle Metropolitan Credit Union, also agreed to a prohibition order. The NCUA alleged that between April 2020 and March 2023, Biscayno violated credit union guidelines to issue fraudulent automobile loans and received commissions tied to those loans.
According to the agency, a review of records found the activity resulted in more than $395,000 in losses to the credit union.
The fourth consent order involved Christopher Chelette, the former chief executive officer of Valex Federal Credit Union in Alexandria, La.
Chelette served as CEO from 2006 through May 2025. The NCUA alleged that between January 2020 and May 2025, he embezzled credit union funds for personal use. Regulators said the misconduct included fraudulent use of corporate credit cards, issuing preferential-rate loans to family members and modifying real estate loans outside credit union policy.
An internal investigation determined the alleged misconduct caused more than $252,000 in losses to the credit union and its members, according to the NCUA.
The fifth case differs from the others because it stemmed from a criminal conviction.
Alan Kaufman, a former CEO of Melrose Credit Union in New York, was issued a conviction-based prohibition after being convicted in federal court on two counts of receiving commissions or gifts for procuring loans.
In a letter to Kaufman, the NCUA said the conviction arose from misconduct that occurred during his employment at Melrose Credit Union. The conviction was entered in the United States District Court for the Southern District of New York.
Prohibition orders are among the most severe administrative sanctions available to the NCUA. Individuals subject to the orders are permanently barred from participating in the affairs of any federally insured depository institution.
The agency said prohibition orders are one of several enforcement tools available under the Federal Credit Union Act. Other actions include cease-and-desist orders, which can require restitution or corrective action, and civil money penalties.
While credit unions generally report low levels of internal fraud relative to the size of the industry, the cases highlight the operational risks institutions face when employees have access to member accounts, lending systems or financial controls. Several of the cases involved misconduct that allegedly continued for years before being detected.
The enforcement actions come as credit unions continue investing heavily in fraud prevention, internal controls and compliance oversight amid growing regulatory scrutiny and increasingly sophisticated financial crimes.
Ken McCarthy is manager of marketing communications at Tyfone, where he monitors the credit union industry and contributes to conversations shaping its future. He previously covered credit unions and community banking for American Banker and S&P Global Market Intelligence. He holds a journalism degree from Point Park University and has more than 15 years of experience covering financial services. He is also the author of three literary fiction novels.
