The National Credit Union Administration this month banned five individuals from participating in the affairs of any federally insured financial institution.
Linda Lee Clark, a former employee of the now-inactive SCICAP Credit Union of Chariton, Iowa, pled guilty to embezzlement charges. Clark was sentenced to more than six years in prison, five years' supervised release and was ordered to pay nearly $2.5 million in restitution.
According to The U.S. Attorney's Office, Southern District of Iowa, Clark, 68, who worked as a bookkeeper, admitted to embezzling $2,494,809 of funds from SCICAP CU over 37 years — from 1978 until she resigned in August 2015. Clark redirected account-holders' deposits into her own personal account and the accounts of her children; and also initiated unauthorized withdrawals of funds from member accounts into her own personal account and the accounts of her children. Clark concealed the embezzlement by maintaining two sets of accounting records on the credit union's data processing system. As a result, the credit union became insolvent and was forced into liquidation.
Maria Guadalupe Hernandez, a former employee of the now inactive El Paso's Federal Credit Union of El Paso, Texas, pled guilty to charges of bank and wire fraud, and conspiracy to commit bank and wire fraud. Hernandez was sentenced to more than 15 years in prison, five years' supervised release and was ordered to pay more than $18.3 million in restitution.
According to The U.S. Attorney's Office, Western District of Texas, the criminal activities of Hernandez, 59, a former manager, and another employee, Hilda Simental Mendoza, a former assistant manager, led to the credit union's liquidation.
As part of the conspiracy, beginning in August 2007, the defendants sold more than 100 EPFCU share certificates to other credit unions, but the defendants did not record the sale of these share certificates in the credit union records, while keeping a log of them on a secret ledger. Money generated by the unrecorded sales of EPFCU share certificates were placed into accounts created and controlled by the defendants using relatives' accounts, dormant customer accounts, and even active accounts belonging to dead individuals.
Mendoza, who is also prohibited by NCUA from working at a federally insured financial institution, pled guilty to charges of bank and wire fraud, and conspiracy to commit bank and wire fraud. Mendoza was sentenced to more than 10 years in prison, five years' supervised release and was ordered to pay more than $18.3 million in restitution.
Pamela Mallory, a former employee of 360 Federal Credit Union, a $219-million institution based in Windsor Locks, Conn., pled guilty to charges of embezzlement. Mallory was sentenced to 21 months in prison, five years' supervised release and was ordered to pay restitution in the amount of $840,378.28.
According to The U.S. Attorney's Office, District of Connecticut, Mallory, 42, worked as a lending manager at the credit union where she had access to loan files and authorized loans, including home equity lines of credit (HELOCs). From 2009 through 2016, she opened five different HELOCs in the name of a credit union member and increased the credit limit of those HELOCs on at least 15 occasions, all without the knowledge or consent of the credit union member. In order to evade detection, Mallory made minimum, interest-only payments on the HELOCs from her own checking account.
When 360 FCU discovered the scheme in January 2016, the credit union member's property, which was worth less than $150,000, supported two HELOCs, each with credit limits of $417,000, that Mallory had fully drawn down.
Linda Reynolds-Sienkiewicz, also known as Linda F. Reynolds, former president and CEO of Pinellas Federal Credit Union, a $117-million institution based in Largo, Fla., pled guilty to the charge of receiving a bribe. Reynolds was sentenced to time served and two years' supervised release.
According to local media reports, Reynolds admitted to soliciting a $21,000 bribe from a company that provided identity theft protection services back in February 2010.
In 2009, Reynolds won a "CEO of the Year” award from NAFCU for credit unions less with less than $150 million in assets.
