A former credit union assistant vice president was sentenced last week to two and half years in federal prison for embezzling $826,000 from the $223 million Pantex Federal Credit Union in Borger, Texas to buy “toys” for her late husband.

U.S. District Court Judge Mary Lou Robinson in Amarillo, Texas ordered Dorothy Stegall Barnes, 57, of Fritch, Texas, who also went by the last name of Newman, to pay restitution totaling $797,336 and serve five years of supervised release following her prison sentence.

Stegall pleaded guilty in September to embezzlement.

Court documents did not specify what kinds of toys Barnes bought with the funds she had been stealing from the credit union from September 1996 to November 2010.

When CU Times asked the federal prosecutor Joshua Jerome Frausto to specify the toys Barnes purchased with stolen credit union funds, Kathy Colvin, a public information officer for the U.S. Attorney's Office for the Northern District of Texas, said the information was not part of the public record and would not explain why it was not part of the public record.

Nevertheless, court documents provided details about how Barnes' embezzlement was exposed and how she managed to embezzle $826,000 over 14 years.

The fraud was uncovered in the summer of 2014 after Barnes told President/CEO Cliff Murley that a teller suddenly quit. After instructing Barnes to count the money in the teller's vault, she later told the CEO the drawer of the teller who suddenly quit was $380,000 short.

A day later, however, an auditor found a transaction traced to Barnes in which she made a transfer of $826,000 in her teller vault. Barnes then admitted to stealing the $826,000 but denied any involvement in the missing $380,000.

According to court documents, Barnes told investigators she embezzled funds in different ways. At first, she took cash from her drawer or vault and deposited it into her personal account at Amarillo National Bank, and paid her personal bills from that account.

She also paid her bills using official Pantex checks, making sure they were under $10,000. Barnes made it look as though another member brought in cash to purchase the official credit union checks, according to court documents.

Federal prosecutors said in court documents that Barnes also created fake cash-in tickets for her drawer or vault. Since no cash actually came in, however, this created a shortage in her drawer, which she had to conceal on her cash counts.

Whenever she was audited, Barnes created a transfer entry between her drawer and her vault after the first one was counted but before the second one was counted to make it appear everything balanced, according to court documents.

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