Regulators Take Over Hard Hit Credit Union

State regulators are taking over a Seattle credit union after two employees admitted embezzling between $1 million and $3 million.

The Emerald City Credit Union, serving about 700 employees of the Interstate Baking Co., had only $5 million in assets.

The Washington Credit Union Share Guaranty Association, a private deposit insurance fund, will run Emerald City until a merger with another institution can be arranged, John Bley, director of the state Department of Financial Institutions, said Wednesday.

The embezzlement, discovered during an audit, apparently involved two employees making loans to fictitious borrowers, Bley said. The case has been referred to King County prosecutors but no charges have been filed.