NCUA Bans Former Employees of Looted, Failed Credit Unions
The NCUA has issued four new prohibition orders that ban four individuals from participating in the affairs of any federally insured financial institution.
Three of the four credit unions failed and were merged into other institutions, the NCUA said in its Friday announcement.
Holly Cowan was a former employee of the shuttered Lawrence County School Employees FCU, which was located in New Castle, Penn. She pled guilty to the charge of embezzlement and income tax evasion and was sentenced to 15 months in prison, three years of supervised release and ordered to pay restitution in the amount of $285,641. The $2.5 million credit union had a little more than 1,000 members when it was liquidated by the NCUA in March 2010. Deposit accounts were assumed by the $37 million First Choice FCU, also of New Castle.
Crystal J. Lankford, the former manager, treasurer and sole employee of the $630,000 H.B.E. Credit Union in Seward, Neb., pleaded guilty to the charge of embezzlement and in January was sentenced to 45 months in prison, five years of supervised release and ordered to pay restitution in the amount of $633,998.56.
According to the FBI, between April 2006 and September 2011, Lankford wrote unauthorized checks to herself and her husband from H.B.E. CU’s operating account at Union Bank and Trust, essentially draining the tiny credit union’s assets. The NCUA closed the looted credit union and merged it with assistance in February 2012.
Keiona Rutledge, a former employee of shuttered $15.5 million G.I.C. FCU, formerly located in Cleveland, Ohio, pleaded guilty to the charges of trafficking and possessing criminal tools. Rutledge was sentenced to one year of community control and ordered to pay a $500 fine.
The NCUA liquidated the 3,476-member credit union Dec. 13, 2012 after declaring it to be insolvent. Some accounts were transferred to the $37.2 million Steel Valley FCU of Cleveland, while other members were issued checks by the NCUA for insured deposits.
Lisa Hood, a former employee of the $666 million AllSouth FCU in Columbia, S.C., was sentenced to five years in prison and five years of probation on charges of financial identity fraud, crimes against a federally insured financial institution and breach of trust with fraudulent intent.
AllSouth is open and thriving, reporting a higher-than-peer-average ROAA of 1.06% as of 2012 year-end and a loan quality index just under 1%.
NCUA enforcement orders are available online at http://go.usa.gov/4ReQ and for inspection at NCUA’s Office of General Counsel between 9 a.m. and 4 p.m. Monday through Friday. Copies may be ordered by mail from NCUA, 1775 Duke St., Alexandria, VA 22314-3428.