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Instead of Oxford, the Credit Union Should’ve Been Named Ponzi. SEC Charges Man Defrauded Thousands Out of Millions with Fake Online CU.

By ThreatMetrix
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Phishing emails tricking the unwary into divulging their personal banking information. That’s child’s play to Timothy J. Coughlin, 63, of Indianapolis, Indiana, who, no matter what his other shortcomings, is clearly one man who doesn’t think small.

It appears Mr. Coughlin took to heart the adage about their being more than one way to skin a cat or a mark (con artist’s term for victim) and, says the Securities and Exchange Commission, created his own financial institution, the Oxford International Credit Union which allegedly bilked 5,000 investors of $12.8 million.

Did we say allegedly? Good. Because Mr. Coughlin is only a defendant at this point and evidently not the only one because the SEC went on to say, “The defendants posted false information to investors’ online accounts to create the appearance that their deposits in the fake credit union were earning substantial daily investment returns.”

The SEC also charged that “Coughlin and Oxford International Credit Union also falsely claimed that member accounts were insured by a private insurance company.” In addition, the SEC says Coughlin used people’s money to “pay personal expenses, fund unrelated business expenses and make distributions to other investors in a classic Ponzi-scheme fashion.”

The SEC also says Coughlin later launched a successor company, Oxford International Cooperative Union (not to be confused with Oxford International Credit Union — or maybe to be confused with Oxford International Credit Union) that also defrauded investors, allegedly misappropriating at least $5.97 million and using investor money for illegitimate purposes.

Allison Ross on, who brought the Oxford scheme to light, observed that, “This is certainly not the first time fraudsters have set up fake banks or credit unions online, and it probably won’t be the last.”

Ross urges consumers to do their homework before putting money in a bank or credit union “whether it’s an online-only bank or a brick-and-mortar bank. Check to make sure the institution is insured by the Federal Deposit Insurance Corp. Look at how sound the bank’s finances are.”

By ThreatMetrix Posted