The longtime manager of the CBS Employees Federal Credit Union pleaded not guilty Thursday to charges of embezzling $40 million from his former Studio City-based employer over two decades and using the funds to gamble, purchase expensive cars and watches, and travel by private jet.
Edward Martin Rostohar, 62, of Studio City entered his plea in Los Angeles federal court to felony counts of bank fraud and aggravated identity theft. No future court dates were immediately scheduled.
Rostohar was arrested March 12 and ordered detained as both a flight risk and an economic danger to the community, according to the U.S. Attorney’s Office.
The charges against Rostohar were made in conjunction with a March 29 announcement by the National Credit Union Administration, a federal agency that regulates credit unions, that it liquidated the CBS credit union and discontinued its operations after determining the financial cooperative was insolvent. Westwood-based University Credit Union immediately assumed CBS Employees’ assets, loans, and all member shares.
An affidavit filed in support of the charges alleges that beginning before 2000 and continuing until March, Rostohar allegedly used his position as a manager at the credit union to make online payments to himself or forged the signature of another credit union employee on checks made payable to himself.
Rostohar faces between two and 30 years in federal prison and a $1 million fine if convicted as charged, according to the U.S. Attorney’s Office.
The scheme was exposed 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, prosecutors allege.
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, according to court papers.
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 allege.
Rostohar was taken into custody and allegedly 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 co-worker’s signature on credit union checks and depositing them into his personal accounts. Rostohar allegedly estimated he stole $40 million, according to the U.S. Attorney’s Office.
Rostohar allegedly told investigators that he gambled away much of the money and spent the rest on traveling by private jet, buying expensive watches, and giving his wife a weekly allowance of $5,000, according to court documents.
He also said he purchased two cars — a Porsche and a Tesla — with money he stole from the credit union, according to court papers.
Rostohar allegedly also admitted to starting a business in Reno, Nevada, in December, and writing tens of thousands of dollars’ worth of checks to himself to cover the business’ costs as well as to pay a $5,000 monthly mortgage on a home in Reno he recently purchased, federal prosecutors said.