Vexed Judge Orders Arrest Warrant for Former CU CEO
A vexed federal judge issued an arrest warrant for a former credit union CEO who failed to show up at his sentence hearing Monday for bank fraud and attempted brank fraud.
Sean Jelen, 35, the former president/CEO of the merged $227 million Valor Federal Credit Union pleaded guilty to bank fraud and attempted bank fraud in July 2016. He embezzled $718,000 to pay for credit card bills, college tuition, his spouse’s birthday party and a golf tournament sponsorship. He also tried to steal $1.1 million by creating a forged severance contract before the board of directors fired him in August 2015.
Jelen was originally scheduled to be sentenced in November 2016, but the hearing did not take place, and it has been postponed ever since. It wasn’t until November 2017 when Jelen’s case was transferred to U.S. District Court Judge Malachy E. Mannion in Scranton, Pa. who agreed to delay the sentencing date a few times.
But the judge’s patience ran out on Monday after he was told Jelen was hospitalized on Sunday night.
According to a court transcript of the sentence hearing obtained by the CU Times, Judge Mannion said he had a court official contact the hospital in Brooklyn to determine if Jelen was admitted to the hospital. Jelen checked into the hospital’s emergency room Sunday night.
“Unfortunately, for Mr. Jelen, his credibility is significantly tarnished through this entire case,” Mannion said. “We know for a fact through this case he, in the past, has authored documents and telephone calls indicating he was a doctor, in order to benefit himself or his activities in a manner that he saw to be appropriate.”
After he got the case in November, the judge said his court tried to expeditiously set it for sentence since it seemed to be continually postponed because of Mr. Jelen.
“It seems to me unusual that Mr. Jelen has so many problems that coincide so directly with dates that he’s to appear for sentencing,” Mannion said. “Maybe he just has horrible luck or maybe part of his stomach problems are being upset with the result of his activities and where that’s going to take him.”
Mannion ordered an arrest warrant, but it is not to be executed until Jelen is released from the hospital.
“As soon as he’s discharged from the hospital, he’s to be arrested and detained and then brought before me for sentencing,” he said.
According to court documents, Jelen will forfeit a home at Breezy Point, a New York City borough of Queens at the western end of the Rockaway peninsula. New York’s Multiple Listings Service estimated that Jelen’s house at 37 Jamaica Walk is valued at more than $640,000.
Jelen was appointed president/CEO in 2012 when he was 29 years old. In June 2014, Jelen was featured as a CU Times Trailblazer 40 Below.
The young, up-and-coming executive began his fraud in July 2014 when the credit union changed its name and brand from Tobyhanna FCU to the Scranton, Pa.-based Valor FCU. After the credit union posted net losses of $3.5 million in 2015 and $2.2 million in 2016, it was merged with the $22.8 billion Pentagon Federal Credit Union in Tysons Corner, Va., during the first quarter of 2017.
In court documents, federal prosecutors detailed how Jelen carried out and concealed his scheme by manipulating credit union records and forging documents to make the payments appear legitimate.
For example, he got Valor to cut a check for more than $30,000 to a vendor that hosted his wife’s birthday party, in part, by forging the vendor’s service contract and forging a special purchase authorization that disguised the payments as an employment incentive. He also altered Valor’s books and records to disguise the payments.
Under the attempted fraud charge, federal prosecutors said Jelen forged a severance contract that provided various payments and other benefits to him, including insurance and annuity policies worth more than $1 million.