BLUEFIELD, W.V. – A federal judge yesterday lifted a stay on a three year-old civil suit filed by NCUA against the former CEO of N&W Poca Division FCU charging she and her family stole as much as $5 million from the tiny credit union, thereby allowing NCUA to pursue its claims.
NCUA alleges the CEO, Deborah Bailey and her husband and their daughters and husbands made fake deposits into their accounts and manipulated phony loans, among other things, which pushed the one-time $7 million Bluefield, W.V., credit union over the in October 2008.
Named as defendants are: Bailey, her husband Kenneth Bailey, their daughter Rebecca Poe and her husband Joey Poe, and their other daughter Pamela Mullins and her husband Christopher Mullins.
The U.S. District Court for the Southern District of West Virginia had stayed the civil suit until federal prosecutors had completed criminal cases against Rebecca Poe, who was assistant manager, and Pamela Mullins, who was the head teller. The two cousins pleaded guilty to fraud charges last year and were sentenced to prison. Both women were order to pay $2.4 million in restitution to NCUA, which liquidated the credit union and paid off depositors.
The suit says the fictitious deposit activity became “too overwhelming” for the defendants to administer, so they devised other schemes including manual check disbursements, bogus loans and failure to post ACH (automated clearing house) debits.
N&W Poca Division FCU was chartered in 1968 to serve employees of the Norfolk and Western Railway and later added employees of American Electric Power Co. (formerly Appalachian Power Co.).
The federal court stayed the civil case on Dec. 1, 2010, at the request of the defendants. The federal court reinstated the case on Wednesday, moved it to the active docket.
