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Credit union leader fired amid accusations of fraud

The nonprofit board that oversees the Village Financial Cooperative still plans to open a location by year’s end

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Me'Lea Connelly poses for a portrait in her office in North Minneapolis
Me'Lea Connelly, former director of Village Financial Cooperative, was fired in August.
Tony Saunders | MPR News 2018

Updated: 6:43 p.m. Thursday | Posted: 5:07 p.m. Tuesday

Two key leaders of Minnesota's first black-led credit union have been fired by its board amid fraud allegations.

Director Me'Lea Connelly and CFO Joe Riemann were ousted in August from the Village Financial Cooperative by the nonprofit Association for Black Economic Power. The allegations include fraud, theft and mismanagement of funds.

Board member Malcolm Wells said the rest of the board and staff want to be as transparent as possible with community members and investors.

“We went to our key internal stakeholders earlier this month and let them know what was going on, and we’ve had to respond to partners and people who’ve put forth a lot of money and a lot of time and resources for seeing this through,” he said.

In interviews with North News, Connelly and Riemann denied any wrongdoing.

Connelly's attorney Dan Leland said on Thursday those allegations are untrue. Leland said his client was forced out after reporting racial discrimination within the organization. Leland said he can't disclose details of Connelly's discrimination claim.

"What she observed is that the the organization was discriminating,” he said. "After she made those reports, she was terminated. And there's no explanation for her termination other than connecting those two events.”

Wells said the credit union will still continue to move forward with plans to open by the end of the year. He said the initial allegation was first reported to the board by an employee of the credit union.

The credit union was expected to open this year with a half-million dollars in public money but had not yet confirmed a location.

News of Connelly’s firing was first reported by the North News community news site.

The city of Minneapolis also pledged $500,000 to the credit union. Most of that commitment —$410,000 — was in the form of a forgivable loan. One condition from the city was that the credit union open a brick-and-mortar location by the end of the year.

An additional $500,000 was announced in the 2020 budget proposal by Minneapolis Mayor Jacob Frey.

A spokesperson with the Minneapolis Police Department said police received a report and are reviewing it.

The Minnesota Department of Commerce declined to comment on Village Financial’s progress toward gaining regulatory approval to operate as a credit union.

There will be a community forum open to the public Oct. 18.

MPR News reporters Matt Sepic and Martin Moylan contributed to this story.