HUNTSVILLE, Ala. – The former president of Lauderdale County Teachers CU and a member of the credit union were indicted by a federal grand jury for a scheme to mask a $6 million loan to the members’ business, the U.S. Attorney’s office announced yesterday.
Melissa Killen, 39, who headed the $32 million Florence, Ala., credit union until last year, and Timothy Shelton, 53, were charged with arranging the $6 million loan for Shelton’s business, Tennessee Valley Bottling Co., by recruiting others to apply for loans in order to avoid the credit union’s loan limits to individuals. Killen allegedly approved the loans without ever meeting the applicants, then recorded all of the loans as real estate or personal loans when all the money was used for Shelton’s business.
Killen knew the purpose of the loans but never reported the business loans to the board of directors or to NCUA on 5300 or other examination reports, according to the indictment.
"The significant risk that financial institution fraud poses to our nation's banking system is heightened when that fraud is carried out by bank employees, the very individuals who are supposed to safeguard the institution's interests," stated U.S. Attorney Alice H. Martin, in announcing the indictments.
