UPDATED, 12:17 PM: The former longtime manager of the CBS Employees Federal Credit Union, has been sentenced to 169 months — more than 14 years — in federal prison for embezzling $40 million during the past two decades. U.S. District Judge Otis D. Wright II handed down the sentence today to Edward Rostohar, 62, of Studio City. He was convicted on May 20 after pleading guilty to bank fraud and has been in custody since his March 13 arrest.
“[Rostohar] has the moral culpability of someone who was willing to leave as many as 43 depositors with deep losses so that he could wear $100,000 watches, buy a new vehicle every couple years, and impress women less than half his age with trips on private jets to international vacation resorts, Tiffany jewelry, and gambling parties,” the government wrote in the prosecution’s sentencing memorandum.
PREVIOUSLY, May 20: The longtime manager of the CBS Employees Federal Credit Union pleaded guilty today to embezzling $40 million during the past two decades. Prosecutors say Edward Rostohar has admitted to the theft and are seeking up to 15 years in prison in the case.
The plea deal includes forfeiture of personal property including bank accounts, expensive cars and jewelry, though authorities believe he gambling away much of the stolen money. Rostohar will be sentenced September 16 in Los Angeles federal court.
According to an affidavit filed with the criminal complaint, beginning before 2000 and continuing until this month, Rostohar used his longtime position as a manager at the federally insured credit union to make online payments to himself or forged the signature of another employee on checks to himself. The feds allege that Rostohar spent the money on gambling and the expensive items noted above.
The alleged scheme was exposed beginning on March 6 when a credit union employee found a $35,000 check made payable to Rostohar, and the check did not include the reason for the high dollar amount, according to court documents. The employee conducted an audit of the credit union checks issued since January 2018 and discovered $3,775,000 in checks made payable to Rostohar and which contained the forged signature of another employee without the employee’s knowledge or consent.
On March 12, the credit union informed Rostohar that he had been suspended from his job after an internal investigation uncovered “irregularities in the performance of your job duties,” according to court documents. Later that day, Rostohar’s wife called 911 and told the dispatcher that her husband had stolen money from work and was leaving the country, court papers state. Rostohar was taken into custody and admitted that he stole money from the credit union for 20 years, beginning by paying the monthly balances on his personal credit cards with funds from the credit union’s online accounts or by forging checks, and later by forging his coworker’s signature on credit union checks and depositing them into his personal accounts, court papers state.
He was arrested on March 15.