Updated: January 16, 2020 10:30 AM
Walk through downtown Little Falls and speak to people on the street and you'll find almost everyone knows the name Margurite Cofell.
Some still compare the former president of the St. Francis Credit Union to Robin Hood, even after Cofell, 62, confessed to defrauding the institution of more than $2.5 million and turned herself in to begin serving an 8-year prison sentence on Wednesday.
"I was totally amazed," said Mary Hanfler of Little Falls. "She gave a lot of that money to friends and people who just couldn't pay their loans."
'A Robin Hood-type syndrome'
Little Falls Mayor Greg Zylka says he was among those shocked to learn the details of Cofell's crime.
"I was like, 'Wow, that's got to be a mistake,'" Zylka said.
He described growing up with Cofell and her family in the nearby city of Flensburg, playing baseball with her brothers, and witnessing Cofell's generosity in the community as president of the St. Francis Credit Union.
"She'd still go to the baseball park on Sundays and volunteer on committees," Zylka said. "[The credit union] had a really good reputation for helping people and being good to people… this is a case of a good person trying to do something good, but in no way did it turn out good."
That view of Cofell as a "good person" was also noted by former FBI Special Agent Kyle Loven who, as chief division counsel, oversaw the fraud investigation of Cofell and the St. Francis Credit Union.
"I think people in that area know that what she did was wrong, it was against the law," Loven said. "There's another part to the story where I'm certain that some people believe that what she was doing was she was helping people, almost a Robin Hood type syndrome."
Yet, court records from an ongoing civil suit show Cofell did benefit from the crime.
Forensic auditors said the portion of the fraud that directly benefitted Cofell, her friends and family totaled about $1.8 million. Auditors also noted fictitious deposits used for "gambling at local casinos and personal expenses such as home improvements."
Didn't fit the profile
Contacted at her home in Little Falls, Cofell declined an interview and refused to comment, but those who know her said they didn't detect any outward signs of a change in Cofell's lifestyle.
"She didn't come up in a Lamborghini to the ballgames and invite everybody out to her lake home. She didn't even get everybody a round of beer at the ballpark," Zylka said.
When a routine exam by the National Credit Union Administration first discovered evidence of the multi-million dollar fraud in 2014, Loven says FBI agents started looking for "luxury items" on which Cofell might have spent the money, but they didn't find anything.
"The FBI has dealt with fraudsters all across the country. One theme is constant in those investigations: Houses, cars, boats, luxury items. It's just a constant theme," Loven said. "In this situation, there doesn't appear to be any of those types of items in play.
"It's highly unusual to not have a demonstration of that wealth manifest itself in some way," Loven said.
Cofell's story of helping people was a central part of her hand-written confession delivered to prosecutors.
In her letter, Cofell wrote that her fraudulent activity at the credit union stretched back as far as 15 years. She described creating fictitious loans and using the money "to pay the loans" of members who were delinquent or for those with "checking accounts that were overdrawn."
In court records, forensic auditors estimated the total losses to St. Francis Credit Union likely exceeded $10 million.
Investigators said Cofell had complete control over the lending process and convinced her board to forgo the standard checks and balances that most credit unions have.
The fraud forced the credit union to be shut down, but its 3,400 members were moved to a new credit union and did not lose any money from their accounts.
While Cofell lost her job as president of St. Francis Credit Union, she kept her position as town clerk in Flensburg for years, until finally resigning that position weeks after she pleaded guilty to the credit union fraud in April 2019.
Cracks in the story
Prior to sentencing at the federal courthouse in St. Paul last month, Cofell's attorneys submitted a 22-page statement to the judge that included Cofell's life story and arguments for a lighter prison term.
In that statement, attorneys noted credit union customers "did not suffer financial losses," but 5 INVESTIGATES uncovered cracks in Cofell's Robin Hood story.
At least one woman, Louise Evans, disputes the perception held by some in the community that Cofell's fraud was a victimless crime.
Evans says collectors repossessed her Jeep after St. Francis Credit Union never sent her a bill for a car loan that was placed in her name after a divorce.
"I kept wondering where a bill was. My attorney tried calling Margurite. She wouldn't return calls back," Evans said. "You go up there and bang on the door – I want to be a good customer, I want to do right and then, there's no bill to pay."
Records later showed mystery payments recorded on Evans' loan that the NCUA later described as "fictitious postings made by the credit union manager" who was Margurite Cofell.
"You do good, you work hard. I was raised 'you pay our bills' and then to just have someone mess up your life like that?" Evans said. "If you look at the numbers, somebody made money on this."
Taking the fall
In court records, auditors accuse Cofell of making fictitious deposits into the accounts of her "boyfriend" and "sister-in-law." 5 INVESTIGATES was unable to reach them for comment.
In her confession, Cofell wrote "I was the only one that was aware of what I was doing," but not everyone is ready to accept that.
"I would have a hard time believing that people didn't realize that their accounts were nearly overdrawn and all of a sudden, those accounts were back to being in the black," Loven said.
"Some of them had to be aware because that money just doesn't disappear," Zylka said. "If anybody did benefit from what Margurite did, they know it and that's got to not feel real good to them because Margurite is taking it all for everybody."
The U.S. Attorney's Office for the District of Minnesota won't confirm or deny whether it's investigating anyone else connected to Cofell. Several former associates of Cofell and former credit union board members contacted by 5 INVESTIGATES also declined to comment.
The more than 1.8 million Minnesota consumers that are member-owners of the state's credit unions can be assured that The National Credit Union Administration (NCUA) insures federal credit union deposits up to $250,000 per individual depositor, the same as FDIC protection for bank account. In this isolated case, no member assets were ever at risk. Minnesota Credit Unions take the security of member's assets very seriously.
Eric Rasmussen can be reached by phone at 651-642-4534 or by email here.
Updated: January 16, 2020 10:30 AM
Published: January 15, 2020 12:00 AM
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