The longtime manager of the CBS Employees Federal Credit Union has been charged with stealing more than $40 million, which he allegedly spent on gambling, private jets and expensive cars, authorities said Friday.
Edward Rostohar, 62, of Studio City was arrested March 12, the same day he was suspended from work and his wife called police to say her husband was leaving the country, according to court documents.
He has been charged with two felony counts of bank fraud and aggravated theft identity. If convicted as charged, Rostohar faces up to 32 years in prison and a $1-million fine, according to Nicola Hanna, U.S. attorney for the Central District of California. His arraignment is set for April 18.
According to an affidavit filed with the criminal complaint, Rostohar’s alleged scheme began nearly 20 years ago. He told authorities that before he started working at CBS Employees Federal Credit Union he had been an examiner with the National Credit Union Administration, a federal agency that regulates credit unions. Rostohar said his insider knowledge helped him escape scrutiny.
The scheme involved a series of payments Rostohar made to himself over the years using his position as a manager, Hanna said in a news release. Some were online payments, while others were checks made payable to himself.
According to court documents, Rostohar was first exposed March 6 when a credit union employee discovered a $35,000 check made payable to Rostohar. When the employee conducted an audit, the person discovered $3,775,000 in checks made payable to Rostohar. Those checks included the forged signature of another employee, who did not give consent.
When Rostohar was arrested, he admitted that he stole money from the credit union, prosecutors said, first by paying monthly balances on his personal credit cards using credit union money. He also said he would forge his co-worker’s signature on credit union checks and deposit them into his personal account, court documents show.
An NCUA investigation showed a potential loss to the credit union of $40,541,130.
Rostohar reportedly lived a lavish lifestyle. He told authorities that he gambled away much of the money and spent a significant amount on traveling by private jet. He said he bought expensive watches and gave his wife a weekly allowance of $5,000. In addition, he said he purchased two cars and paid a $5,000 monthly mortgage on a home in Reno. He started a business in Reno in December 2018 and wrote tens of thousands of dollars’ worth of checks to himself to cover the costs of the business, prosecutors said.
Officials with the NCUA announced that it has liquidated CBS Employees Federal Credit Union and discontinued its operations after determining that it was insolvent with no prospect of restoring operations on its own. University Credit Union, located in Westwood, has assumed CBS Employees’ assets, loans and all member shares.