A 67-year-old widow and grandmother was sentenced to six and a half years in prison Tuesday for a nearly $2.5 million embezzlement, which led to the collapse of an Iowa credit union where she worked as a bookkeeper.

Since the time she was hired at the $2.1 million SCICAP Credit Union in 1978, Linda Lee Clark began stealing from the cooperative in the small rural town of Chariton. By the time her theft finally surfaced in August 2015, she embezzled $2,494,809.

Clark’s lawyer, F. Montgomery Brown of West De Moines, Iowa, said his client was also ordered by U.S. District Court Judge Rebecca Goodgame Ebinger to serve five years of supervised release after her prison term and to pay $2.4 million in restitution.

She pleaded guilty to embezzlement by a credit union employee in July in U.S. District Court in Des Moines.

Federal prosecutors in court documents said Clark concealed her theft for more than three decades by maintaining two sets of accounting records on the credit union’s data processing system.

The first accounting database maintained by Clark included member loans and share balances including loan payments and deposits. She used this database to generate member statements to report balances members would have expected.

The second accounting database included the member loan and share information that Clark provided to the examiners and call report information. The account balances in this database included members’ actual account balances reflected in the first database, but minus the funds Clark stole from their accounts, according to court documents.

She redirected members’ deposits to her account and the accounts of her two adult children. She also initiated unauthorized withdrawals of funds from SCICAP member accounts into her personal account and the accounts of her children.

As her fraud scheme progressed, both from taking member deposits and withdrawing funds from member accounts, Clark used this same method to reimburse unrelated accounts from which she had previously withdrawn funds and unrelated accounts on which she had previously failed to credit for deposits, according to a report conducted by Lillie & Company, a Sunbury, Ohio-based CPA firm that investigated the embezzlement case for the NCUA.

“She typically made these deposits to prevent the members from being suspicious about their balances if they requested a withdrawal from their account or wished to close out their account,” according to the Lillie & Company report.

Clark also refused to allow other credit union employees, including SCICAP President/CEO Connie Banks and others, to access the system, according to the Lillie & Company report. Banks was the only other employee and had no accounting knowledge.

Clark also claimed that to her knowledge, she was the only person aware of the fraud scheme, according to Lillie & Company.

How did Clark keep employees from accessing the data processing system for nearly four decades? Her lawyer said his client just told them “no.”

In their sentencing memo, prosecutors recommended a prison sentence for Clark of six and a half to eight years.

“It is also significant that although Defendant confessed, she has yet to provide an explanation for where the money went,” prosecutors wrote in their memo.

Prosecutors said Clark had no reason to commit the fraud other than greed. They noted Clark had no substance abuse issues or devastating medical bills, and did not have a difficult childhood.

“Despite stealing nearly $2.5 million, she has significant credit card debt and continues to pay expenses for family members such as hundreds of dollars in cell phone bills. Defendant sold property to pay off a personal loan and ceased making mortgage payments,” prosecutors wrote. “These are not actions of someone seeking to make right a wrong.”

However, Clark’s lawyer argued the government does know how his client spent some of the money she stole, adding that she had an “insatiable desire” to buy stuff for herself and others beyond her historical means.

“The government has acquired all of the Defendant’s bank records and various credit card billing statements,” Brown wrote in his memo. “At least over the last five years before disclosure, the government knows that Defendant has made purchases of thousands of items in numerous stores in Central Iowa and online far beyond her ability to pay on her income. The government knows where the money she deposited into her Corydon State Bank account went. The government knows that she spent considerably monthly sums on grocery stores and convenience stores on nearly a daily basis. The government knows she paid for vacations for her family.”

Brown said Clark decided to reveal her crime on one Sunday night in August 2015 to Banks. On Monday, she explained in detail to auditors how she committed her 37-year scheme and from which accounts she embezzled funds.

“She reported it,” Brown said. “They weren’t going to discover it, in her opinion, and she wanted to tell them about it anyway.”

In its victim impact statement, the NCUA said, “While the financial losses suffered by the credit union were staggering, we cannot begin to place a dollar value on the emotional distress and innumerable hardships Clark caused the members of the credit union by her actions and the abuse of the trust and confidence the members placed in her. The effect of the actions of Clark reverberated beyond the credit union itself and touched the community as a whole.”

The $579 million Community 1st Credit Union of Ottumwa, Iowa, assumed most of SCICAP’s 858 members, assets and loans.

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