The former manager of a credit union that was founded to aid the city’s Latino community was sentenced Thursday to serve 7.5 years for defrauding the government and embezzling $2.3 million, leading to the institution’s liquidation.
Ignacio Morales, 50, was the former bank manager of Borinquen Federal Credit Union, once located in Hunting Park at 629 West Erie Ave.
The credit union was founded in 1974 by a Catholic social-service organization to serve as a Spanish-speaking lender/banker to more than 7,500 members, primarily Latino residents of Northwest Philly.
Morales pleaded guilty to income tax fraud, money laundering and drug-trafficking charges in September 2012.
His scam came to light when Angel Maldonado, a drug dealer now serving a 25-year prison term, was arrested in April 2010. Federal agents discovered a letter from Morales in the dealer's house vouching for a $14,000 cash loan.
Authorities discovered that from 2006 to 2011, Morales stole hundreds of dollars at a time from BFCU for his own personal use, including buying kilos of cocaine.
He took a 20-percent "commission" from credit union depositors' refund checks - despite the fact the National Credit Union Association forbids federal credit unions from acting as check-cashing entities, according to court records. He further cooked the books to hide his deception.
The NCUA seized the BFCU on June 24, 2011 and a month later liquidated its remaining assets.
Morales was also ordered to pay $7.3 million to the IRS for unpaid taxes.