HMCU founder posts bail
Published: March 6, 2013
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ST. THOMAS - Stan McDuffie, the founder of Her Majesty's Credit Union, posted bail late Monday, but V.I. Justice Department investigators are still looking for the credit union's comptroller, John Williams.
"He's a wanted man right now," V.I. Attorney General Vincent Frazer said.
The two are accused of obtaining money by false pretenses, conspiracy, embezzlement by fiduciaries, as well as violating the territory's anti-racketeering statute - the Criminally Influenced and Corrupt Organizations Act.
The credit union, which was uninsured and largely unregulated by the V.I. government, abruptly closed its doors to the public one year ago. Many of its members lost the money they had in the credit union and to date have not gotten any of it back.
In February 2012, The Daily News began to look into the credit union after getting calls from members who could no longer access their money. When a reporter called Frazer for comment, it was the first time he was made aware of the situation.
"I'd like to thank you for alerting us of this," Frazer told The Daily News on Tuesday.
The day after an investigative report was published in the newspaper in April, Frazer announced a joint investigation with the V.I. Department of Licensing and Consumer Affairs.
Frazer said Tuesday that during the year-long probe into the credit union, agents were in regular communication with McDuffie as well as with federal and local authorities in Colorado, where McDuffie lives.
"When we began the process for arrest, we offered him the opportunity to turn himself in, at which point he came down," Frazer said.
Frazer would not confirm whether the Justice Department knows the whereabouts of Williams, but the attorney general said he does have a warrant out for Williams' arrest.
The arrest warrants for Williams and McDuffie were issued Feb. 19.
McDuffie, 46, was arrested Monday and was advised of his rights by V.I. Superior Court Judge Kathleen Mackay. She set his bail at $50,000, and he was allowed to post 10 percent, or $5,000, which he did once he was done with the booking process late Monday night.
He surrendered his passport to the court and signed a waiver of extradition.
Assistant Attorney General Denise George-Counts said the waiver allows him to leave the territory and return to Colorado. If he fails to appear as required by the court, Virgin Islands officials can go to Colorado and bring him back to the territory.
"Basically it says that if we have to find him, we can just go up and get him," she said.
McDuffie's arraignment date has been set for March 21; however, he signed a waiver of appearance at arraignment. George-Counts said his legal counsel will appear on his behalf to enter a plea on that date.
Frazer said that McDuffie and Williams currently are the only principals of the credit union - or its parent company, Jilapuhn - who are facing criminal charges.
A number of other Jilapuhn board members, relatives of McDuffie, are dead, he said.
McDuffie, who is the chief executive officer of Jilapuhn, uses the aliases Stan Roberson, Stan Roberson-Battle and Stanley Battle. He is facing civil charges in federal court filed by the U.S. Securities and Exchange Commission and has been jailed in the past for refusing to cooperate with state investigators in Colorado looking into possible fraud.
The civil matter and the criminal case are not in conflict, according to Frazer.
While he would not say how many victims came forward to assist with the case, Frazer said the information provided was "very useful" in building the case against McDuffie and Williams.
Between August 2008 and March 2012, Her Majesty's Credit Union collected more than $500,000 from its members, according to the affidavit filed by V.I. Justice Department Special Investigations Division Director James McCall,
"It may seem like small amounts of money, but to the individuals, many of whom are of little means, it was a lot," Frazer said. "It's a good thing we stopped it before it really mushroomed."
"For a lot of these people, it was their life savings," McCall said.
Frazer said that as prosecutors prepare for trial, they may file motions to freeze bank accounts or seize assets of McDuffie or Williams.
There are no guarantees that the victims will get their money back, but if McDuffie is convicted of the charges against him, it is more likely, according to Frazer.
"During sentencing, he can be ordered to pay restitution to his victims," Frazer said.
Frazer said the case would not have been investigated if people had not come forward.
"Sometimes people are too embarrassed to complain, so these kinds of crimes go undiscovered and unremedied," Frazer said. "The public should know, before you hand over your hard-earned money to strangers and fly-by-night operators, they should make sure to check with the regulatory agencies."
- Contact reporter Aldeth Lewin at 714-9111 or email firstname.lastname@example.org.
- September 2005 - Jilapuhn is registered as a corporation with the Lt. Governor's Division of Corporations and Trademarks.
- October 2007 - Jilapuhn registers the trade name Her Majesty's Credit Union with the Lt. Governor's Office.
- August 2008 - Jilapuhn receives a license from the Department of Licensing and Consumer Affairs to operate a credit union in the territory.
- May 2009 - Under the name Her Majesty's Credit Union, it opens in a storefront inside Tutu Park Mall on St. Thomas.
- August 2008-March 2012 - Her Majesty's Credit Union takes in more than $500,000 from members, some from the Virgin Islands and some from the states.
- December 2010 - Her Majesty's Credit Union CEO Stan McDuffie is sentenced to one year in jail for contempt of court and failure to produce financial documents to Colorado investigators.
- January 2012 - The credit union's members are told the computer system is inoperable, and while the credit union continues to accept deposits, it refuses to allow members to make withdrawals.
- February 2012 - Her Majesty's Credit Union shuts its doors with no notice to members.
- March 2012 - The Securities and Exchange Commission launches an investigation into possible securities fraud perpetuated by HMCU.
- April 30, 2012 - The Daily News publishes "License to Steal," an investigative report on the credit union and Stan Roberson, aka Stan McDuffie.
- May 1, 2012 - The V.I. Justice Department and DLCA announce a formal investigation into the credit union.
- November 2012 - The SEC files a civil lawsuit against Her Majesty's Credit Union.
- Feb. 19 - Arrest warrants are issued for Her Majesty's Credit Union CEO Stan McDuffie and comptroller John Williams.
- March 4 - Stan McDuffie turns himself in to authorities in the Virgin Islands and is arrested and advised of his rights. He is released on bail.