Newspaper article THE JOURNAL RECORD

Penn Square `a Great Bank, a Super Bank,' Credit Union Told

Newspaper article THE JOURNAL RECORD

Penn Square `a Great Bank, a Super Bank,' Credit Union Told

Article excerpt

An account executive with a New York money broker told the treasurer of Bolling Air Force Base's credit union that Penn Sq uare Bank in Oklahoma City was "a great bank, a super bank," in early April 1982, according to a tape recording played Friday in U.S. District Court.

First United Fund, a Garden City, N.Y., broker, is on trial in Oklahoma City for fraud in connection with its brokering of jumbo certificates of deposit in Penn Square Bank to Bolling Federal Credit Union of Washington, D.C., and two other out-of-state credit unions.

Bolling Federal Credit Union had a $1 million certificate of deposit in Penn Square Bank on July 5, 1982, when the bank was declared insolvent and closed by federal regulators.

Phil Loiacona, treasurer and general manager of the Bolling credit union, testified that he decided to invest $1 million in Penn Square Bank as a result of what First United Fund's account executive, known as "Dr. Kirk Armstrong," told him in a telephone conversation on April 8, 1982.

On the tape of that phone conversation, a voice identified as "Kirk Armstrong," whose legal name was Girvin Kirk, offered this information about Penn Square Bank:

"This is one of the top banks in the country. This is a great bank, a super bank."

Kirk Fredrickson, the Bolling credit union's attorney, asked Loiacona if "Dr. Kirk Armstrong" offered any explanation for his description of Penn Square Bank as "a great bank."

Loiacona said the broker's account executive had told him that First United Fund's accountants had gone over Penn Square Bank's financial statements.

Fredrickson asked Loiacona whether it would have affected his decision to do business with First United Fund - if he had known, at that time, that "Dr. Kirk Armstrong" was the assumed name of the account executive, whose legal name was Girvin Kirk.

"It's always been my experience," Loiacona said, "that when you deal with someone who is handling money, they should use their real name. …

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