Former Edinburg credit union CEO petitions government for seized property

The former president and CEO of the troubled Edinburg Teachers Credit Union is attempting to get thousands of dollars’ worth of artwork back from the federal government after it was seized when the credit union was placed under conservatorship.

Jeffrey Moats, who served as president and CEO of the credit union until March, filed a petition against the National Credit Union Administration Board in an attempt to retrieve property that was seized by the agency, including several paintings and sculptures, many of which were each worth thousands of dollars.

On March 26, the Texas Credit Union Department appointed the National Credit Union Administration, an independent federal agency, as the conservator of the Edinburg Teachers Credit Union “to protect the membership’s interests,” according to a news release issued at the time.

In a petition filed Thursday, Moats alleges the NCUA seized thousands of dollars in personal property from Moats without a warrant or probable cause.

“Shortly after the Credit Union was placed in conservatorship, the Conservator repudiated Mr. Moats’s employment contract, without notice, opportunity to cure, or explanation,” the petition stated. “Mr. Moats was terminated without cause, and since Mr. Moats’s termination, the Credit Union has refused repeated requests to return personal property belonging to Mr. Moats from his offices at the Credit Union.”

In April, Moats’ attorney corresponded with an attorney for the NCUA in an attempt to retrieve the items, but the NCUA said it would try to return the items once they were sure they were Moats’ personal property.

In an email dated April 20, Bruce Hegyi, an attorney for NCUA, wrote that Moats had admitted there was a “commingling problem” with his accounts at Vanguard, an investment management property. Commingling is the combining of assets or funds into a single account.

“In light of all of this, I’m sure you can appreciate that ‘caution’ is an appropriate watchword,” Heygi wrote. “If, as, and when it is determined that the artwork was purchased by Mr. Moats with monies validly and lawfully belonging to him, then the artwork will be returned to him.”

Terry Kernell, an attorney for Moats, wrote the following day that there was no “commingling problem” and denied that Moats ever said there was.

“If the commission justified conservatorship with any evidence allegedly showing Mr. Moats obtaining monies not ‘validly and lawfully belonging to him,’ NACU has it and can send it to us so we can respond,” Kernell wrote. “If not, NACU is withholding his personal property while looking for reasons for withholding it. That is conversion, not caution.”

The next day, Heygi pushed back on that.

“Although I can appreciate your statement of your confidence that your client did not engage in any wrongdoing and that there is no ‘commingling problem,’ please allow me to suggest that my frame of reference might be a bit broader than the one currently available to you,” Heygi said. “Mr. Moats admitted wrongdoing to various NCUA personnel, including a ‘commingling problem’ related to Vanguard accounts.”

In May, Moats then filed a lawsuit against the NCUA in Travis County which was later remanded to federal court in the Western District of Texas. That case is still ongoing.

The Edinburg credit union remains under conservatorship, though details as to why a conservator was appointed have not been disclosed.

However, there is an ongoing investigation into the credit union and, as part of it, the NCUA issued a subpoena to some of its former officials including Moats and Brian J. Warren, the former board secretary.

In an attempt to get Warren to comply with the subpoena, Heygi, wrote in an email to Warren:

“In a final effort to avoid the need to file a legal action in Federal Court against you, please be advised that we are aware (without limitation) that:

>> You had a personal financial relationship with Jeffrey Moats; that he made you at least one $10,000 personal loan, with regard to which you made monthly payments to him over several years;

>> Mr. Moats and various (former) Board Members frequently engaged in text communications and/or email communications before and/or after March 26, 2021; and

>> Mr. Moats made regular cash gifts and/or other gifts to the various (former) Board Members.”

Warren has since begun cooperating with the NCUA, according to court filings.

As for Moats’ attempts to retrieve his property, an initial conference in the case is scheduled for November.

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