Prohibition orders issued by the NCUA Oct. 30 marked the final chapter in two embezzlement cases so large, they resulted in credit union failures. In total, three individuals were banned from participating in the affairs of any federally insured financial institution.
Linda Sue Newcomb, former president/CEO of the now closed Lynrocten Federal Credit Union in Lynchburg, Va., pleaded guilty to embezzlement, bank fraud and aggravated identity theft and was sentenced to 10 years in prison and five-years supervised release. She also was ordered to pay more than $11.7 million in restitution.
From October 2009 to October 2011, Newcomb negotiated and entered into loan participation agreements with the $18.7 million Northern Piedmont FCU in Warrenton, Va. In these loan participation agreements, Newcomb included false loans, including three loans she put in the name of a deceased member, according to court documents.
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