GRAND RAPIDS, Mich. (WOOD) — The president of Grand Rapids-area investment company has been charged with fraud for allegedly taking well over $6 million from the firm and faking banking documents.
Gifford Cummings Jr., also known as Chip Cummings, was indicted Wednesday on a count of credit union fraud, six counts of wire fraud and a count of computer intrusion causing damage.
In December 2018, the indictment alleges Cummings, who was serving as president and CEO of Red Oak Capital, was trusted with a $1.35 million check of the company’s funds to be used to pay down a line of credit to Northeast Bank. Instead, federal investigators say, he deposited the money into an account called Northwind Financial, which he controlled. He did this “by means of false and fraudulent pretenses to Lake Michigan Credit Union,” according to the indictment.
To cover it up, Cummings marked the Northeast Bank line of credit as “repaid” in Red Oak’s books and records. He told business partners and investors that it had been paid off when it was not.
Nearly a year later, between November 2019 and July 2020, Cummings invested $5 million of Red Oak’s money into an account with Woodstock Capital without letting his partners know or give consent, the indictment alleges. When Cummings’ partners found out, they demanded he redeem the investment.
He did not, the indictment says. Instead, he allegedly created a fake letter saying the funds had been redeemed as well as five false account statements, which he emailed to his Red Oak partners.
The indictment seeks to make Cummings give up the $6.35 million in ill-gotten gains and anything he may have bought with it.