Former Manager Arrested In Lynrocten FCU Criminal Probe

LYNCHBURG, Va.—Linda Newcomb, the former manager of the failed Lynrocten FCU, was arrested Tuesday as investigators continue to bring to justice former employees suspected of fraud that led to the demise of the $14 million-asset credit union.

NCUA shuttered Lynrocten in May of 2013.

Newcomb's arrest follows former employee Teresa Humphries earlier their year pleading guilty in U.S. District Court to embezzling more than $1 million as part of a fraud scheme that led to the CU's demise and cost the NCUSIF more than $7 million.

Federal prosecutors said in court Humphries and the credit union manager carried out a variety of embezzlement schemes.

Investigators have said illegal activities - including fake loans and check fraud - occurred at LFCU between 2000 and May 2013.

A search warrant related to the credit union indicated that between $2 million and $3 million in fraud allegedly took place, with approximately 125 fake loans taken out in the names of actual members. Approximately 25 members have signed affidavits that they did not take out loans that are in their names, authorities have stated.

Amherst County Sheriff Jimmy Ayers said in a published report that he could not speak to any charges Newcomb might face because his office did not lead the investigation.

Late last year the $20 million Northern Piedmont FCU, Warrenton , Va., filed suit against Newcomb, Humphries and former LFCU employee Becky Nichols claiming Piedmont lost $1.7 million in loan participation agreements due to fraud.