The former president of a small credit union, who was also treasurer of his league chapter, pleaded guilty to bank fraud this week in U.S. District Court in St. Louis, according to court documents.

Paul C. Smith, who worked at Laclede Community Credit Union from 2007 to 2012 and served as treasurer of the Illinois Credit Union League’s George G. Burnett chapter, admitted he used a debit card tied to his position as chapter treasurer to pay for almost $60,000 in personal expenses for five years, according to the U.S. Attorney’s Office.

Since the chapter’s bank account was at LCCU, Smith was able to hide the fraud by manipulating the credit union’s computer system and records, according to court documents.

The $67 million, 10,400-member LCCU in Alton, Ill., merged last month with the $509 million, 45,500-member 1st MidAmerica Credit Union.

1st MidAmerica did not reply to requests for comment by deadline.

William Willie, public relationship coordinator for the Illinois Credit Union League, said the group had no comment about the court case, other than that the current and future stability of the chapter is not an issue.

Smith, 54, who pleaded guilty June 30, was indicted by a federal grand jury last fall.

The fraud was discovered in April 2012, when another LCCU employee initiated an internal investigation after discovering irregular transactions tied to the chapter’s debit card issued to Smith, the court records said.

For two months, the whistleblower observed Smith making purchases and ATM withdrawals with the card, but the transactions were not debited from the chapter’s bank account, the documents said.

Smith prevented the fraudulent transactions from posting to the chapter’s account by turning off the debit card system and deactivating his debit card, according to court documents.

When the system was turned back on, the transactions were reported to LCCU, but

since they were linked to a deactivated debit card, they did not post to an account, the documents said.

Transactions that occurred, but did not post to an account, were automatically reflected on an unposted item report to be resolved by LCCU at a later time. Smith was the only person at LCCU authorized to access that report, prosecutors said.

In the credit union books, he concealed the theft by simply writing off the costs of the transactions as ATM operational expenses, the court documents said.

As a result, LCCU unknowingly paid for the expenditures, the documents said.

After the whistleblower reported the irregular activity, the credit union hired a certified

public accounting firm to conduct an audit, which discovered 140 fraudulent transactions associated with the card, the documents said.

Investigators confirmed that Smith used the chapter’s debit card to make $58,286.85 in fraudulent purchases and ATM withdrawals from 2007 to 2012, according to court records. He eventually copped to the crimes.

To recover its losses, LCCU submitted a claim for reimbursement from its insurance carrier for $58,286.85 and $24,650 for auditing services, according to court records.

Smith’s sentencing is set for Sept. 29. He faces up to 30 years in prison, a $1 million fine, restitution and up to five years of supervised release. The case is being prosecuted by Assistant United States Attorney Steven D. Weinhoeft.

While the convicted fraudster awaits sentencing, members and employees of his former credit union are moving on.

This spring, LCCU members voted to approve the merger with 1st MidAmerica.

The deal received approval from NCUA and the Illinois Department of Financial and Professional Regulation.

The merger is now effective, according to 1st MidAmerica’s website.

When the merger was announced in April, the credit unions stated in a press release that all current LCCU employees would be able to continue their careers at 1st MidAmerica and that members would receive expanded services as a result of merging.

“This is a tremendous opportunity for our combined membership, bringing expanded convenience to all our members and internal efficiencies to the organization that will benefit our overall level of service,” Alan Meyer, CEO and president of 1st MidAmerica, stated in the press release announcing the merger.