An ordained minister of a Pentecostal church has been banned from running a financial institution after issuing over £1m of “unlawful” loans.
Reverend Carmel Jones, the head of the Pentecostal Credit Union, was found to have fallen short of standards required by the Financial Services Authority in channelling money purportedly lent to the credit union’s members to churches.
Tracey McDermott, FSA director of enforcement and financial crime, said: “This is a disgraceful case of a credit union putting the interests of another organisation before those of its members. The FSA will not tolerate this conduct in the industry.
“Credit unions are vital institutions for the communities they serve, and the members of The Pentecostal Credit Union deserved better.”
As The Daily Telegraph reported in July , the investigation by the Financial Services Authority has already resulted in the £10m turnover credit union freezing certain activities.
The FSA found that Rev Jones, who was granted an MBE in 1990 for his work with the Pentecostal Credit Union, authorised loans 14 payments where the money was not paid to the individuals purportedly taking out the loans.
Instead of being paid to its members the cash was given to a Pentecostal Church group. Some of the individuals whose names were attached to the loan documentation were aware of the payments others had not even signed the loan agreements.
When the relationship between the PCU and the Church broke down repayments on the potentially fraudulent loans ceased to be made leaving the PCU £670,000 out of pocket.
The FSA said it had not fined the credit union after taking into consideration its co-operation with the regulator and the important work the institution does in the community.
The watchdog also said it had taken into account the fact that Rev Jones had not gained any financial benefit from the misconduct. If it had not been for these facts Rev Jones could have faced a £60,000 fine.