Berlin credit union in class action suit deal

Guardian Angel Credit Union, the Berlin-based lead plaintiff in a three-year-old class action suit against a larger Iowa bank, has reached a confidential settlement, according to recent filing in federal district court in Concord.The settlement came after U.S. District Court Judge Paul J. Barbadoro refused to throw out charges in July that MetaBank breached its contract with Guardian Angel and some 34 other depository institutions, by negligently allowing a rogue employee to steal about $4 million in 2005.MetaBank, which has 13 branches and $686 million in assets, is traded on the Nasdaq exchange under the ticker CASH.But Barbadoro’s decision did not allow punitive damages or attorney’s fees, so had the case gone to trial the most the plaintiffs could have hoped for was the $4.95 million that they claimed they lost.However, in class action settlements, the lead plaintiff usually gets a larger award.Guardian Angel, which has less than $40 million in assets, lost some $99,000, according to the complaint.It was a MetaBank investigation that uncovered the fraud.”The settlement is fair and reasonable,” said Christopher T. Meier, a North Conway attorney who represented the bank.The lawsuit stems from the criminal actions of Charlene Marie Pickhinke, an Iowa MetaBank branch office supervisor who was sentenced in 2009 to seven years in federal prison after pleading guilty to one count each of wire fraud, making a false statement in a bank’s books and records, money laundering and aggravated identity theft.Pickhinke, an employee for 28 years, was given the authority to send and receive wire transfers, move money around and open accounts, as long as the amount involved was less than $100,000.Pickhinke, using MetaBank’s letterhead, induced Guardian Angel to purchase what it thought was a $99,000 MetaBank CD in April 2005, but Pickhinke transferred the money into an account she controlled under a false name.MetaBank argued that it didn’t make direct representations that Pickhinke had the authority to issue the CDs, but because of her employment by the bank and the letterhead, “MetaBank cloaked her with the apparent authority to act on its behalf,” ruled Barbadoro.Notice has been sent out to the other plaintiffs with the terms of the settlement, which still has to be approved by the court. A hearing on that settlement has been scheduled for the end of the March. The terms might be made public after then. — BOB SANDERS/NEW HAMPSHIRE BUSINESS REVIEW