Ex-Loan Officer Gets Two-Year Sentence For Lending Fraud

A former loan officer for Southland Credit Union was sentenced to two years in federal prison for loan fraud, according to the U.S. Attorney's office.

Ibell Abellon, 40, of La Crescenta, Calif., pled guilty to four counts of bank fraud on Dec. 9, 2002. In addition to the prison term, U.S. District Judge J. Spencer Letts ordered Abellon to pay $237,429 in restitution.

Officials in the U.S. Attorney's Los Angeles office said from January 2000 to October 2001, Abellon funded 17 bogus loans totaling $367,995. Of that amount, Southland CU's actual losses were approximately $267,000- which Ed Fox, the CU's president and CEO, said were covered under a CUNA Mutual bond.

"The important thing is, our members suffered absolutely no loss from this," he said.

Fox said Abellon worked for Southland CU for approximately three years. He said she employed a variety of loan fraud schemes, including using new loans to pay off older loans. When credit union management uncovered the bogus loans, Fox confronted Abellon, who denied all but one or two minor issues.

"I assured her we would uncover everything, and after a thorough, internal audit, we did," said Fox. "We then notified the proper authorities."

Judge Letts ordered Abellon to report to prison to begin serving her sentence May 30. She will serve five years on supervised release following her release from prison.