Philadelphia-Area Aerospace Workers President Sentenced in Credit Union Fraud/Kickback Scheme

Running a labor union and a credit union at the same time may be a bad combination. For Anthony Forte it was. Forte, formerly president of United Aerospace Workers Local 1069 and executive vice president of the Boeing Helicopters Credit Union (BHCU), was sentenced on February 22 in U.S. District Court for the Eastern District of Pennsylvania to 28 months in prison and ordered to pay more than $1.25 million in restitution for organizing a massive loan fraud and kickback scam nearly a decade ago. His ailing younger brother, David, was sentenced to (and since has served) a day in prison and was ordered to pay $178,446 in restitution. Both men had pleaded guilty in November 2009 after being charged in September 2008. Six other defendants ranging in age from 33 to 40 also were prosecuted.

United Aerospace Workers Local 1069, an affiliate of the United Auto Workers, is a major presence in the economy of Delaware County, Pa., southwest of Philadelphia. The union represents around 1,800 workers at Boeing’s Ridley Park assembly plant, which makes U.S. Army Chinook helicopters. Anthony Forte, 43, a resident of Glen Mills, Pa., saw in the BHCU a side opportunity to make money. It just wasn’t the legal kind.

Federal prosecutors alleged that during November 2001-November 2002 Forte used his position at the credit union to receive cash kickbacks of at least 5 percent in return for approving $20,000 loans to unqualified applicants. He typically would receive an unauthorized cash payment of at least $1,000 for each loan, while instructing loan processors to approve the paperwork despite the borrower’s clear lack of creditworthiness. The credit union also knowingly approved loans that contained phony supporting documents. Many applications listed the names of nonexistent relatives and/or inflated income and other financial data. Anthony Forte recruited his brother and the other co-defendants to recruit applicants. By the time FBI investigators uncovered the scheme, Forte and his middlemen had received more than $100,000 in kickbacks from more than $2.2 million worth of these “liar loans.”

This case, in other words, is a microcosm of the dishonesty that lay underneath much of the ongoing credit meltdown in this country, a collapse made possible by leaders in both major political parties obsessing over “access” to mortgage and other loans. The laxity of credit standards spawned many fraudulent underwriting practices. “The defendants in this case callously victimized a small credit union on a massive scale to line their own pockets,” noted Acting U.S. Attorney Laurie Magid at the time of the charges. “Instead of insuring that the credit union made prudent and appropriate loans, these defendants made sure that the only criterion for obtaining a loan was whether the borrower would be willing to pay them off.” As a result of this scam, the Boeing employees’ credit union may be forced to raise fees on members, most if not virtually all of whom also belong to Aerospace Workers Local 1069.