Feds Find Firearms in Lynrocten Manager's Home
Evidence obtained at the Madison Heights, Va., home of former Lynrocten FCU Manager Linda Susan Newcomb led to her arrest Tuesday afternoon for her alleged involvement in a $10 million loan fraud scheme.
In addition to confiscating various documents, a laptop computer, an iPad and two cell phones from Newcomb’s home in May, FBI and Secret Service agents also confiscated 91 firearms of various calibers, hundreds of rounds of ammunition, holsters and three containers of “green plant-like material,” according to search warrant documents obtained by CU Times.
“The firearms were confiscated due to the fact an occupant of the residence admitted to being a convicted felon,” the search warrant stated.
Court documents also revealed that Newcomb and her husband, identified as A.E.N., purchased 19 properties throughout Amherst County, Va., with a tax value of approximately $1.8 million.
Amherst County Sheriff Jimmy Ayers said his office assisted in Newcomb’s arrest at the request of the FBI and Secret Service. She allegedly participated in a loan fraud scheme hatched in 2000 involving more than 800 false loans exceeding $10 million. Sheriff Ayers said the arrest was made without incident.
Teresa Wieringo Humphries, a former teller at the failed cooperative, pleaded guilty in January to embezzling more than $1 million. Humphries, 58, also admitted participating in the fraudulent scheme with another employee, which contributed to the collapse of $13.8 million cooperative in Lynchburg, Va., in May 2013.
That other employee was identified as the credit union manager, according to court papers. Humphries said that she and Newcomb came up with the fraud scheme about 10 years ago to originate loans in member names without their authorization. They deposited those loan funds into accounts of Humphries and Newcomb family members.
Humphries also told investigators that Newcomb kept track of the fraudulent loans.
But when questioned by police in April, 2013, Newcomb denied any knowledge of fraud scheme that had been uncovered by NCUA examiners, according to court papers. What’s more, when pressed by police, Newcomb could not explain the financial irregularities discovered by NCUA.
Humphries is scheduled to be sentenced Sept. 23. She faces up to 30 years in prison and/or a fine of up to $1 million.
Humphries, Newcomb and another Lynrocten FCU Teller Becky Nichols were named as defendants in a $1.7 million civil lawsuit filed by the $20 million Northern Piedmont Federal Credit Union of Culpeper, Va., which accused the three of loan participation fraud.
Northern Piedmont seeks to recover almost $1.7 million, according to the civil complaint.
Court papers show Northern Piedmont wired more than $3 million to Lynrocten from 2009 to 2011 under agreements based on fraudulent misrepresentations.
“Newcomb and Humphries concocted a scheme to originate loans, allegedly including the loans in which Northern Piedmont purchased participations, in members’ names without the members’ authorization,” the complaint stated.
NCUA attorney Kevin Holt, who filed a motion to intervene as a defendant in the case, stated that Northern Piedmont’s lawsuit is premature and could potentially deplete the pool of assets available to all parties.
By being allowed to intervene, Holt said the NCUA would be able to carry out the purpose of the Federal Credit Union Act and facilitate an orderly liquidation.
In April 2013, Amherst Circuit Court Judge J. Michael Gamble, who granted the motion, agreed that the Federal Credit Union Act allows the NCUA to intervene.
“Because this litigation concerns an asset of Lynrocten, no court has jurisdiction over this cause of action until the NCUA completes its liquidation process,” Gamble wrote in a March 21 letter to attorneys involved in the case.
By intervening, the NCUA could seek to move the case to U.S. District Court in Lynchburg and attempt to have it dismissed.